Note 4 — Consolidated Investments

As of June 30, 2014, the major components of our consolidated real estate properties, Springhouse at Newport News, Grove at Waterford, Enders Place at Baldwin Park, MDA Apartments, Village Green of Ann Arbor, a mid-rise community in development known as 23Hundred @ Berry Hill, North Park Towers and Lansbrook Village, were as follows:


Property	Land		Building and Improvements		Construction in Progress		Furniture, Fixtures and Equipment		Totals
MDA	$	9,500,000	$	51,557,101	$	—	$	659,685	$	61,716,786
Lansbrook		6,912,000		49,456,641		—		1,175,860		57,544,501
Village Green Ann Arbor		4,200,000		51,290,114		84,723		1,017,273		56,592,110
Springhouse		6,500,000		27,693,513		—		1,167,771		35,361,284
23Hundred@Berry Hill		5,000,000		20,738,728		4,377,453		1,529,487		31,645,668
Grove		3,800,000		24,594,797		2,273		827,780		29,224,850
Enders		5,453,486		22,108,049		—		1,176,975		28,738,510
North Park Towers		1,400,000		13,085,628		—		522,152		15,007,780
	$	42,765,486	$	260,524,571	$	4,464,449	$	8,076,983	$	315,831,489
Less: Accumulated Depreciation		—		6,670,129		—		1,055,638		7,725,767
Totals	$	42,765,486	$	253,854,442	$	4,464,449	$	7,021,345	$	308,105,722

Depreciation expense was $2,174,242 and $3,393,465 for the three and six months ended June 30, 2014, respectively and $1,067,163 and $2,130,930 for the three and six months ended June 30, 2013, respectively.

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 was $1,663,481 and $1,735,864 for the three and six months ended June 30, 2014, respectively. Amortization expense related to our in-place leases and deferred financing costs was $408,704 and $1,224,488 for the three and six months ended June 30, 2013, respectively.

Substantially concurrently with the completion of the IPO, we completed a series of related contribution transactions pursuant to which we acquired indirect equity interests in four apartment properties, and a 100% fee simple interest in a fifth apartment property for an aggregate asset value of $152.3 million (inclusive of Oak Crest which is accounted for under the equity method and Springhouse, which has been reported as consolidated for the periods presented). Since the completion of the IPO, the Company purchased an additional property for $58.6 million and made an aggregate of $10.2 million in preferred equity investments in two development projects. The total projected development cost for the two development projects, comprised of 636 units including land acquisition, is approximately $118.6 million.

Note 5 — Consolidated Investments

As of December 31, 2013, the major components of the Company’s 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			Construction in Progress		Furniture, Fixtures and Equipment			Totals
Springhouse	$	6,500,000	$	27,663,473		$	—	$	1,107,824		$	35,271,297
Creekside		1,920,000		17,953,935			—		491,111			20,365,046
Enders		4,750,000		19,262,413			—		908,405			24,920,818
Berry Hill		5,000,000		4,286,905			16,695,988		310,055			26,292,948
MDA		9,500,000		51,547,961			—		615,980			61,663,941
	$	27,670,000	$	120,714,687		$	16,695,988	$	3,433,375		$	168,514,050
Less: Accumulated Depreciation		—		(4,807,728	)		—		(700,977	)		(5,508,705	)
Totals	$	27,670,000	$	115,906,959		$	16,695,988	$	2,732,398		$	163,005,345

Depreciation expense was $4,358,584 and $1,150,477 for the years ended December 31, 2013 and 2012, respectively.

Costs of intangibles related to the Company’s 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 the Company’s in-place leases and deferred financing costs was $1,454,192 and $1,685,593 for the years ended December 31, 2013 and 2012, respectively.

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 $234,184 and $234,370 as of December 31, 2013 and 2012, respectively, for the Company’s consolidated real estate properties. No individual tenant represents over 10% of the Company’s annualized base rent for the consolidated real estate properties.