Investments in Real Estate

9 Months Ended

Sep. 30, 2012

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

Note 4 – Investments in Real Estate

As of September 30, 2012, the Company has invested in the following real estate properties through joint venture partnerships. The following table provides summary information regarding the Company’s investments ($ in thousands) that are either consolidated or presented on the equity method of accounting.

								Joint Venture  Investment Information
Multifamily Community Name/Location	Approx. Rentable Square Footage		Number of Units		Date of Initial Acquisition	Property Acquisition Cost(1)		Gross Amount of Our Investment		Our Ownership Interest in Property Owner			Approx. Annualized Base Rent (2)		Average Annual  Effective Rent Per Unit(3)		Approx. % Leased
Springhouse at Newport News/Newport News, Virginia		310,826		432	12/03/2009	$	29,250	$	2,670		38.25	%	$	4,287	$	9		92	%
The Reserve at Creekside Village/Chattanooga, Tennessee		211,632		192	03/31/2010	$	14,250	$	717		24.70	%	$	2,222	$	11		93	%
The Estates at Perimeter/ Augusta, Georgia		266,148		240	09/01/2010	$	24,950	$	1,931		25.00	%	$	2,971	$	12		94	%
Gardens at Hillsboro Village/  Nashville, Tennessee		187,430		201	09/30/2010	$	32,394	$	1,298		12.50	%	$	3,615	$	18		97	%
Total/Average		976,036		1,065		$	100,844	$	6,616				$	13,095	$	13		94	%

(1) Property Acquisition Cost excludes acquisition fees and closing costs.

(2) Annualized base rent is calculated by annualizing the current, in-place monthly base rent for leases as of September 30, 2012 and does not take into account any rent concessions or prospective rent increases.

(3) Annual effective rent per unit includes the effect of tenant concessions over the term of the lease.

As of September 30, 2012, the major components of our consolidated real estate properties, Springhouse at Newport News and The Reserve at Creekside Village, were as follows:

Property	Land		Building and Improvements			Furniture, Fixtures and Equipment			Totals
Springhouse	$	6,500,00000	$	27,493,773		$	1,027,613		$	35,021,386
Creekside		1,920,000		17,940,974			419,977			20,280,951
	$	8,420,000	$	45,434,747		$	1,447,590		$	55,302,337
Less: Accumulated Depreciation		-		(395,838	)		(75,134	)		(470,972	)
Totals	$	8,420,000	$	45,038,909		$	1,372,456		$	54,831,365

Depreciation expense was $450,972 and $470,972 for the three and nine months ended September 30, 2012. There was no depreciation expense for the three and nine months ended September 30, 2011, as all of our investments were reported under the equity method of accounting and, thus, presented in a single, net line item amount.

Costs of intangibles related to our consolidated investments in real estate consist of the value of in-place leases. These in-place leases are amortized over the remaining term of the in-place leases, approximately a six-month term. Amortization expense related to our in-place leases was $635,674 and $663,926 for the three and nine months ended September 30, 2012. There was no amortization expense associated with our in-place leases during the three and nine months ended September 30, 2011, as all of our investments were reported under the equity method of accounting and, thus, presented in a single, net line item amount.

Operating Leases

The Company’s real estate assets are leased to tenants under operating leases for which the terms and expirations vary, for duration equal to 12 months or less. The leases may have provisions to extend the lease agreements, options for early termination after paying a specified penalty and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the consolidated real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit. Amounts required as a security deposit vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $89,712 as of September 30, 2012 for the Company’s consolidated real estate properties. There were no security deposits recorded as of December 31, 2011, as all of our investments were reported under the equity method of accounting and, thus, presented in a single, net line item amount. No individual tenant represents over 10% of the Company’s annualized base rent for the consolidated real estate properties.