Investments in Real Estate

12 Months Ended

Dec. 31, 2018

Note 4 – Investments in Real Estate

As of December 31, 2018, the Company owned interests in thirty-three consolidated operating properties and fourteen properties through preferred equity and mezzanine loan investments. The following tables provide summary information regarding the Company’s consolidated operating properties and preferred equity and mezzanine loan investments, which are either consolidated or accounted for under the equity method of accounting.

Consolidated Operating Properties

Multifamily Community Name	Location	Number of Units		Date Built / ‎ Renovated (1)		Ownership
ARIUM at Palmer Ranch	Sarasota, FL		320		2016		100.0	%
ARIUM Glenridge	Atlanta, GA		480		1990		90.0	%
ARIUM Grandewood	Orlando, FL		306		2005		100.0	%
ARIUM Gulfshore	Naples, FL		368		2016		100.0	%
ARIUM Hunter’s Creek	Orlando, FL		532		1999		100.0	%
ARIUM Metrowest	Orlando, FL		510		2001		100.0	%
ARIUM Palms	Orlando, FL		252		2008		100.0	%
ARIUM Pine Lakes	Port St. Lucie, FL		320		2003		85.0	%
ARIUM Westside	Atlanta, GA		336		2008		90.0	%
Ashford Belmar	Lakewood, CO		512		1988/1993		85.0	%
Ashton Reserve	Charlotte, NC		473		2015		100.0	%
Citrus Tower	Orlando, FL		336		2006		96.8	%
Enders Place at Baldwin Park	Orlando, FL		220		2003		92.0	%
James on South First	Austin, TX		250		2016		90.0	%
Marquis at Crown Ridge	San Antonio, TX		352		2009		90.0	%
Marquis at Stone Oak	San Antonio, TX		335		2007		90.0	%
Marquis at The Cascades	Tyler, TX		582		2009		90.0	%
Marquis at TPC	San Antonio, TX		139		2008		90.0	%
Outlook at Greystone	Birmingham, AL		300		2007		100.0	%
Park & Kingston	Charlotte, NC		168		2015		100.0	%
Plantation Park	Lake Jackson, TX		238		2016		80.0	%
Preston View	Morrisville, NC		382		2000		100.0	%
Roswell City Walk	Roswell, GA		320		2015		98.0	%
Sands Parc	Daytona Beach, FL		264		2017		100.0	%
Sorrel	Frisco, TX		352		2015		95.0	%
Sovereign	Fort Worth, TX		322		2015		95.0	%
The Brodie	Austin, TX		324		2001		92.5	%
The Links at Plum Creek	Castle Rock, CO		264		2000		88.0	%
The Mills	Greenville, SC		304		2013		100.0	%
The Preserve at Henderson Beach	Destin, FL		340		2009		100.0	%
Veranda at Centerfield	Houston, TX		400		1999		93.0	%
Villages of Cypress Creek	Houston, TX		384		2001		80.0	%
Wesley Village	Charlotte, NC		301		2010		100.0	%
Total			11,286

(1)

Represents date of last significant renovation or year built if there were no renovations.

Depreciation expense was $53.9 million, $35.5 million and $23.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Intangibles related to the Company’s consolidated investments in real estate consist of the value of in-place leases. In-place leases are amortized over the remaining term of the in-place leases, which is approximately six months. Amortization expense related to the in-place leases was $8.8 million, $13.1 million and $7.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.

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 individually significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of their security deposit. Security deposits received in cash related to tenant leases are included in other accrued liabilities in the accompanying consolidated balance sheets and totaled $2.4 million and $2.3 million as of December 31, 2018 and 2017, 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.

Preferred Equity and Mezzanine Loan Investments

Multifamily Community Name	Location	Actual / Planned Number of Units		Actual / Estimated Initial Occupancy	Actual / Estimated Construction Completion
Whetstone Apartments	Durham, NC		204	3Q 2014	3Q 2015
Alexan CityCentre	Houston, TX		340	2Q 2017	4Q 2017
Helios	Atlanta, GA		282	2Q 2017	4Q 2017
Alexan Southside Place	Houston, TX		270	4Q 2017	1Q 2018
Leigh House, formerly Lake Boone Trail	Raleigh, NC		245	3Q 2017	3Q 2018
Vickers Historic Roswell, formerly Vickers Village	Roswell, GA		79	2Q 2018	3Q 2018
Domain at The One Forty, formerly Domain	Garland, TX		299	2Q 2018	4Q 2018
Arlo, formerly West Morehead	Charlotte, NC		286	2Q 2018	2Q 2019
Cade Boca Raton, formerly APOK Townhomes	Boca Raton, FL		90	4Q 2018	2Q 2019
Novel Perimeter, formerly Crescent Perimeter	Atlanta, GA		320	3Q 2018	2Q 2019
Flagler Village	Fort Lauderdale, FL		385	2Q 2020	3Q 2020
North Creek Apartments	Leander, TX		259	4Q 2019	3Q 2020
Riverside Apartments	Austin, TX		222	3Q 2020	4Q 2020
Wayforth at Concord	Concord, NC		150	1Q 2020	2Q 2021
Total			3,431