Investments in Real Estate

12 Months Ended

Dec. 31, 2012

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

Note 4 – Investments in Real Estate

As of December 31, 2012, the Company has invested in six operating real estate properties and one development property through joint venture partnerships. The following table provides summary information regarding the Company’s in service investments ($ in thousands), which are either consolidated or presented on the equity method of accounting.

								Joint Venture Equity Investment Information
Multifamily Community Name/Location	Approx. Rentable Square Footage		Number of Units		Date Acquired	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	12/3/2009	$	29,250	$	2,670		38.25	%	$	4,290	$	10		93	%
The Reserve at Creekside Village/Chattanooga, Tennessee		211,632		192	3/31/2010	$	14,250	$	717		24.70	%	$	2,233	$	11		89	%
The Estates at Perimeter/ Augusta, Georgia		266,148		240	9/1/2010	$	24,950	$	1,931		25.00	%	$	2,968	$	12		91	%
Gardens at Hillsboro Village/Nashville, Tennessee		187,430		201	9/30/2010	$	32,394	$	1,298		12.50	%	$	3,635	$	18		92	%
Enders Place at Baldwin Park/Orlando, Florida		234,600		198	10/02/2012	$	25,100	$	4,599		48.40	%	$	3,518	$	18		95	%
MDA Apartments/Chicago, Illinois(4)		160,290		190	12/17/2012	$	54,900	$	6,098		35.31	%	$	5,066	$	26		91	%
Total/Average		1,370,926		1,453		$	180,844	$	17,313				$	21,710	$	16		92	%

⁽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 December 31, 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.

⁽⁴⁾ The approximate rentable square footage for the MDA Apartments includes 8,200 square feet of retail place.

On October 18, 2012, the Company acquired a 58.575% indirect equity interest and, on December 17, 2012, the Company acquired 5.158% indirect equity interest in a to-be developed class A, mid-rise apartment community known as 23Hundred @ Berry Hill located in Nashville, Tennessee (the “Berry Hill Property”), for a total investment of $4.2 million. The Berry Hill Property is anticipated to consist of approximately 194,275 rentable square feet encompassing 266 units.

As of December 31, 2012, the major components of our consolidated real estate properties, Springhouse at Newport News, The Reserve at Creekside Village, Enders Place at Baldwin Park, 23Hundred @ Berry Hill and MDA Apartments were as follows:

Property	Land		Building and Improvements			Furniture, Fixtures and Equipment			Totals
Springhouse	$	6,500,000	$	27,497,853		$	1,035,523		$	35,033,376
Creekside		1,920,000		17,949,209			421,543			20,290,752
Enders		4,750,000		19,166,705			523,710			24,440,415
Berry Hill		5,000,000		2,206,264			-			7,206,264
MDA		9,500,000		50,814,244			455,359			60,769,603
	$	27,670,000	$	117,634,275		$	2,436,135		$	147,740,410
Less: Accumulated Depreciation		-		(980,602	)		(169,875	)		(1,150,477	)
Totals	$	27,670,000	$	116,653,673		$	2,266,260		$	146,589,933

Depreciation expense was $1,150,449 for the year ended December 31, 2012. There was no depreciation expense for the year ended 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.

Costs of intangibles related to our consolidated investments in real estate consist of the value of in-place leases and deferred financing costs. In-place leases are amortized over the remaining term of the in-place leases, approximately a six-month term, and deferred financing costs are amortized over the life of the related loan. Amortization expense related to our in-place leases and deferred financing costs were $1,685,593 for the year ended December 31, 2012. There was no amortization expense during the year ended 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.

Operating Leases

The Company’s real estate assets are leased to tenants under operating leases for which the terms and expirations vary. 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 $234,370 as of December 31, 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.