Note 5 – Acquisition of Real Estate

The following describes the Company’s significant acquisition activity during the six months ended June 30, 2017:

Acquisition of Bell Preston View

On February 17, 2017, the Company, through subsidiaries of its Operating Partnership, acquired a 91.8% interest in a 382-unit apartment community located in Morrisville, North Carolina, known as Bell Preston View Apartments (“Preston View”) for approximately $59.5 million. The purchase price of $59.5 million was funded, in part, with a $41.1 million senior mortgage loan secured by the Preston View property.

Acquisition of Wesley Village

On March 9, 2017, the Company, through subsidiaries of its Operating Partnership, acquired a 91.8% interest in a 301-unit apartment community and adjacent land located in Charlotte, North Carolina, known as Wesley Village Apartments (“Wesley Village”) for approximately $57.2 million. The purchase price for Wesley Village of approximately $57.2 million was funded, in part, with a $40.5 million senior mortgage loan secured by the Wesley Village property.

Acquisition of five-property Texas Portfolio (“Texas Portfolio”)

On June 9, 2017, the Company, through subsidiaries of its Operating Partnership, acquired a 90.0% interest in a portfolio of five apartment community properties containing 1,408-units, located in San Antonio and Tyler, Texas for approximately $188.9 million. The purchase price for the five-property portfolio was funded, in part, with the assumption of five senior mortgage loans of a total of approximately $146.4 million secured individually by each of the portfolio properties. The properties are Marquis at Crown Ridge, Marquis at Stone Oak and Marquis at TPC located in San Antonio, Texas, and Marquis at The Cascades I and II located in Tyler, Texas.

Purchase Price Allocations

The acquisitions of Wesley Village, Preston View and the Texas Portfolio have been accounted for as asset acquisitions. The purchase prices were allocated to the acquired assets and assumed liabilities based on their estimated fair values at the dates of acquisition.

The following table summarizes the assets acquired and liabilities assumed at the acquisition date (amounts in thousands):

	Purchase Price Allocation
Land	$	30,615
Building		237,651
Building improvements		17,997
Land improvements		10,671
Furniture and fixtures		4,855
In-place leases		6,013
Other assets		666
Total assets acquired	$	308,468
Mortgages assumed	$	146,377
Total liabilities acquired	$	146,377

The pro-forma information presented below represents the change in consolidated revenue and earnings as if the Company's acquisitions of Wesley Village, Preston View, the Texas Portfolio and 2016 acquisitions, had occurred on January 1, 2016 (amounts in thousands, except per share amounts).

	Six Months Ended June 30,						Six Months Ended June 30,
	2017						2016
			Pro-Forma						Pro-Forma
	As Reported		Adjustments		Pro-Forma		As Reported		Adjustments		Pro-Forma

Revenues	$	53,710	$	10,283	$	63,993	$	35,033	$	29,247	$	64,280
Net income (loss)	$	44,696	$	(3,665)	$	41,031	$	(4,585)	$	(17,102)	$	(21,687)
Net income (loss) attributable to common stockholders	$	12,579	$	(3,362)	$	9,217	$	(9,179)	$	(15,674)	$	(24,853)

Income (loss) per share, basic and diluted ⁽¹⁾	$	0.49			$	0.36	$	(0.45)			$	(1.21)

⁽¹⁾ Pro-forma earnings (loss) per share, both basic and diluted, are calculated based on the net earnings (loss) attributable to the Company.

Aggregate property level revenues and net loss for 2017 acquisitions of Wesley Village, Preston View and the Texas Portfolio, since the properties’ respective acquisition dates, that are reflected in the Company’s consolidated statement of operations for the six months ended June 30, 2017 amounted to $4.4 million and $0.09 million, respectively.