Real Estate

Real estate consists of:



	Third Quarter-End			Year-End
	2013			2012
	(In thousands)
Entitled, developed and under development projects	$	369,084		$	361,827
Undeveloped land (includes land in entitlement)	87,489			82,688
Commercial and income producing properties
Carrying value	80,381			100,855
Less: accumulated depreciation	(27,487		)	(28,220		)
Net carrying value	52,894			72,635
	$	509,467		$	517,150

Included in entitled, developed and under development projects are the estimated costs of assets we expect to convey to utility and improvement districts of $63,795,000 at third quarter-end 2013 and $50,476,000 at year-end 2012, including $41,795,000 at third quarter-end 2013 and $34,252,000 at year-end 2012 related to our Cibolo Canyons project near San Antonio, Texas. These costs relate to water, sewer and other infrastructure assets we have submitted to utility or improvement districts for approval and reimbursement. We submitted for reimbursement to these districts $15,713,000 in first nine months 2013 and $4,345,000 in first nine months 2012. We collected reimbursements of $1,840,000 from these districts in first nine months 2013 and $972,000 in first nine months 2012. We expect to collect the remaining amounts billed when these districts achieve adequate tax bases to support payment.

Also included in entitled, developed and under development projects is our investment in the resort development owned by third parties at our Cibolo Canyons project. We received $2,700,000 in payments from the special improvement district in first nine months 2013 and $1,950,000 in first nine months 2012. At third quarter-end 2013, we have $29,818,000 invested in the resort development.

In first nine months 2013, commercial and income producing properties decreased by $29,707,000 as result of selling Promesa, a 289-unit multifamily property we developed in Austin, for $41,000,000. We received $21,522,000 in net proceeds, reduced our outstanding debt by $18,902,000 and recognized $10,881,000 in segment earnings. At third quarter-end 2013, commercial and income producing properties primarily represents our investment in a 413 guest room hotel in Austin with a carrying value of $20,881,000 and our investment in multifamily development sites located in Charlotte, Nashville and Dallas with a combined carrying value of $30,367,000.

Depreciation expense, primarily related to commercial and income producing properties, was $1,927,000 in first nine months 2013 and $2,736,000 in first nine months 2012 and is included in other operating expenses.