Investment in Unconsolidated Entities (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Unconsolidated Investment

General information on the La Costa LLC and Bay Hill properties as of March 31, 2013 was as follows:

Unconsolidated Investment	Partner		Ownership Interest			Formation/ Acquisition Date	Property
La Costa LLC(1)		GEM		20	%	September 7, 2012	La Costa Town Center
Bay Hill(2)		MDC		50	%	October 19, 2012	The Fountains at Bay Hill

⁽¹⁾  At March 31, 2013, La Costa, LLC, had real estate assets of $23.5 million, total assets of $25.8 million, mortgages payable of $14.1 million and total liabilities of $14.9 million. For the three months ended March 31, 2013, total revenues were $1.9 million, total expenses were $1.4 million and net income was $186,000. The mortgage note was assumed with the contribution of the property. The mortgage note bears interest at the rate of LIBOR plus a margin of 575 basis points (6.0% at March 31, 2013). The mortgage note has a maturity date of October 1, 2014, which may be extended for three additional one-year periods at the LLC’s election and upon the satisfaction of certain conditions (including the payment of an extension fee upon the exercise of the 2^nd and 3^rd renewal options, execution of an interest rate cap and the establishment of certain reserve accounts). La Costa LLC has also entered into an interest rate cap related to the mortgage note, which limits LIBOR to a maximum of 3.0% and expires on October 1, 2014.

⁽²⁾  At March 31, 2013, there were $23.8 million in outstanding borrowings on the mortgage note assumed with the acquisition of the Bay Hill property. The mortgage note bears interest at the rate of LIBOR plus a margin of 325 basis points (3.5% at March 31, 2013). The mortgage note has a maturity date of April 2, 2015, which may be extended for two additional one-year periods at the borrower’s election and upon the satisfaction of certain conditions.