10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-34995

Preferred Apartment Communities, Inc.

(Exact name of registrant as specified in its charter)

Maryland	27-1712193
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3284 Northside Parkway NW, Suite 150, Atlanta, GA 30327

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (770) 818-4100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.01 per share	APTS	NYSE

Securities registered pursuant to Section 12(g) of the Act:

Title of each class

Series A Redeemable Preferred Stock, par value $0.01 per share

Warrant to Purchase Common Stock, par value $0.01 per share

Series M Redeemable Preferred Stock, par value $0.01 per share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ¨   Accelerated filer x   Non-accelerated filer ¨   Smaller reporting company ¨ Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No  x

The number of shares outstanding of the registrant’s Common Stock, as of July 26, 2019 was 44,456,571.

PART I - FINANCIAL INFORMATION
INDEX
Item 1.	Financial Statements	Page No.
	Condensed Consolidated Balance Sheets (unaudited) – as of June 30, 2019 and December 31, 2018	2
	Condensed Consolidated Statements of Operations (unaudited) – Three Months and Six Months Ended June 30, 2019 and 2018	3
	Condensed Consolidated Statements of Stockholders' Equity (unaudited) – Three Months and Six Months Ended June 30, 2019 and 2018	4
	Condensed Consolidated Statements of Cash Flows (unaudited) – Six Months Ended June 30, 2019 and 2018	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	73
Item 4.	Controls and Procedures	74
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	74
Item 1A.	Risk Factors	74
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 3.	Defaults Upon Senior Securities	74
Item 4.	Mine Safety Disclosures	74
Item 5.	Other Information	75
Item 6.	Exhibits	75

Preferred Apartment Communities, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except per-share par values)	June 30, 2019			December 31, 2018
Assets
Real estate
Land	$	571,776		$	519,300
Building and improvements	2,902,740			2,738,085
Tenant improvements	141,339			128,914
Furniture, fixtures, and equipment	298,891			278,151
Construction in progress	9,418			8,265
Gross real estate	3,924,164			3,672,715
Less: accumulated depreciation	(344,702		)	(272,042		)
Net real estate	3,579,462			3,400,673
Real estate loan investments, net of deferred fee income and allowance for loan loss	335,292			282,548
Real estate loan investments to related parties, net	24,888			51,663
Total real estate and real estate loan investments, net	3,939,642			3,734,884
Cash and cash equivalents	94,081			38,958
Restricted cash	50,478			48,732
Notes receivable	19,241			14,440
Note receivable and revolving lines of credit due from related parties	25,902			32,867
Accrued interest receivable on real estate loans	24,406			23,340
Acquired intangible assets, net of amortization of $131,941 and $113,199	138,418			135,961
Deferred loan costs on Revolving Line of Credit, net of amortization of $513 and $180	1,591			1,916
Deferred offering costs	3,684			6,468
Tenant lease inducements, net of amortization of $2,693 and $1,833	20,151			20,698
Receivable from sale of mortgage-backed security	—			41,181
Tenant receivables (net of allowance of $0 and $1,662) and other assets	66,795			41,567
Variable Interest Entity ("VIE") assets from mortgage-backed pool, at fair value	596,129			269,946
Total assets	$	4,980,518		$	4,410,958
Liabilities and equity
Liabilities
Mortgage notes payable, net of deferred loan costs and
mark-to-market adjustment of $40,603 and $40,127	$	2,429,242		$	2,299,625
Revolving line of credit	—			57,000
Real estate loan investment participation obligation	—			5,181
Unearned purchase option termination fees	5,893			2,050
Deferred revenue	41,603			43,484
Accounts payable and accrued expenses	49,819			38,618
Accrued interest payable	7,492			6,711
Dividends and partnership distributions payable	21,425			19,258
Acquired below market lease intangibles, net of amortization of $19,611 and $15,254	51,801			47,149
Prepaid rent, security deposits, and other liabilities	17,074			17,611
VIE liabilities from mortgage-backed pool, at fair value	571,999			264,886
Total liabilities	3,196,348			2,801,573
Commitments and contingencies (Note 11)
Equity
Stockholders' equity
Series A Redeemable Preferred Stock, $0.01 par value per share; 3,050
shares authorized; 1,929 and 1,674 shares issued; 1,829 and 1,608
shares outstanding at June 30, 2019 and December 31, 2018, respectively	18			16
Series M Redeemable Preferred Stock, $0.01 par value per share; 500
shares authorized; 74 and 44 shares issued; 73 and 44 shares outstanding
at June 30, 2019 and December 31, 2018, respectively	1			—
Common Stock, $0.01 par value per share; 400,067 shares authorized;
44,247 and 41,776 shares issued and outstanding at
June 30, 2019 and December 31, 2018, respectively	442			418
Additional paid-in capital	1,784,197			1,607,712
Accumulated (deficit) earnings	—			—
Total stockholders' equity	1,784,658			1,608,146
Non-controlling interest	(488		)	1,239
Total equity	1,784,170			1,609,385
Total liabilities and equity	$	4,980,518		$	4,410,958

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Preferred Apartment Communities, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
	Three months ended June 30,						Six months ended June 30,
(In thousands, except per-share figures)	2019			2018			2019			2018
Revenues:
Rental revenues	$	95,592		$	76,552		$	187,830		$	150,814
Other property revenues	3,512			1,805			5,690			3,348
Interest income on loans and notes receivable	12,093			13,658			23,381			23,958
Interest income from related parties	1,632			4,374			7,434			8,639
Miscellaneous revenues	1,023			—			1,023			—
Total revenues	113,852			96,389			225,358			186,759
Operating expenses:
Property operating and maintenance	12,466			10,107			23,258			18,912
Property salary and benefits (including reimbursements of $4,213, $3,930,
$8,292 and $7,539 to related party)	4,828			4,228			9,485			8,127
Property management fees (including $2,502, $2,156, $4,969 and $4,260 to related parties)	3,373			2,776			6,640			5,532
Real estate taxes	12,544			10,063			25,044			20,038
General and administrative	1,913			1,957			4,527			3,798
Equity compensation to directors and executives	306			950			617			2,085
Depreciation and amortization	45,663			42,095			90,952			82,711
Asset management and general and administrative expense fees to related party	8,209			6,621			16,038			12,862
Insurance, professional fees and other expenses	2,690			2,008			5,218			3,453
Total operating expenses	91,992			80,805			181,779			157,518
Waived asset management and general and administrative expense fees	(2,795		)	(1,429		)	(5,424		)	(2,649		)
Net operating expenses	89,197			79,376			176,355			154,869
Operating income before gains on sales of real estate and trading investment	24,655			17,013			49,003			31,890
Gains on sales of real estate and trading investment	—			2			4			20,356
Operating income	24,655			17,015			49,007			52,246
Interest expense	27,611			22,347			54,367			43,315
Change in fair value of net assets of consolidated VIEs from mortgage-backed pools	584			54			725			54
Loss on extinguishment of debt	(52		)	—			(69		)	—
Gain on sale of real estate loan investment	747			—			747			—
Net (loss) income	(1,677		)	(5,278		)	(3,957		)	8,985
Consolidated net loss (income) attributable to non-controlling interests	571			140			79			(240		)
Net (loss) income attributable to the Company	(1,106		)	(5,138		)	(3,878		)	8,745
Dividends declared to preferred stockholders	(27,542		)	(20,924		)	(53,081		)	(40,441		)
Earnings attributable to unvested restricted stock	(7		)	(6		)	(9		)	(8		)
Net loss attributable to common stockholders	$	(28,655	)	$	(26,068	)	$	(56,968	)	$	(31,704	)
Net loss per share of Common Stock available
to common stockholders, basic and diluted	$	(0.66	)	$	(0.66	)	$	(1.32	)	$	(0.81	)
Weighted average number of shares of Common Stock outstanding,
basic and diluted	43,703			39,383			43,194			39,241

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Preferred Apartment Communities, Inc.
Condensed Consolidated Statements of Stockholders' Equity
For the three-month period ended June 30, 2019
(Unaudited)
(In thousands, except dividend per-share figures)	Series A and Series M Redeemable Preferred Stock		Common Stock		Additional Paid in Capital			Accumulated Earnings			Total Stockholders' Equity			Non-Controlling Interest			Total Equity
Balance at April 1, 2019	$	18	$	432	$	1,698,810		$	—		$	1,699,260		$	309		$	1,699,569
Issuance of Units	1		—		123,909			—			123,910			—			123,910
Issuance of mShares	—		—		17,137			—			17,137			—			17,137
Redemptions of Series A Preferred Stock	—		7		(3,113		)	—			(3,106		)	—			(3,106		)
Exercises of warrants	—		3		3,341			—			3,344			—			3,344
Syndication and offering costs	—		—		(15,961		)	—			(15,961		)	—			(15,961		)
Equity compensation to executives and directors	—		—		157			—			157			—			157
Conversion of Class A Units to Common Stock	—		—		38			—			38			(38		)	—
Current period amortization of Class B Units	—		—		—			—			—			149			149
Net income (loss)	—		—		—			(1,106		)	(1,106		)	(571		)	(1,677		)
Reallocation adjustment to non-controlling interests	—		—		108			—			108			(108		)	—
Distributions to non-controlling interests	—		—		—			—			—			(229		)	(229		)
Dividends to series A preferred stockholders
($5.00 per share per month)	—		—		(27,566		)	1,059			(26,507		)	—			(26,507		)
Dividends to mShares preferred stockholders
($4.79 - $6.25 per share per month)	—		—		(1,082		)	47			(1,035		)	—			(1,035		)
Dividends to common stockholders ($0.2625 per share)	—		—		(11,581		)	—			(11,581		)	—			(11,581		)
Balance at June 30, 2019	$	19	$	442	$	1,784,197		$	—		$	1,784,658		$	(488	)	$	1,784,170

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Preferred Apartment Communities, Inc.
Condensed Consolidated Statements of Stockholders' Equity, continued
For the three-month period ended June 30, 2018
(Unaudited)
(In thousands, except dividend per-share figures)	Series A and Series M Redeemable Preferred Stock		Common Stock		Additional Paid in Capital			Accumulated Earnings			Total Stockholders' Equity			Non-Controlling Interest			Total Equity
Balance at April 1, 2018	$	13	$	392	$	1,357,725		$	—		$	1,358,130		$	2,702		$	1,360,832
Issuance of Units	1		—		113,448			—			113,449			—			113,449
Issuance of mShares	—		—		8,360			—			8,360			—			8,360
Redemptions of Series A Preferred Stock	—		4		(3,297		)	—			(3,293		)	—			(3,293		)
Exercises of warrants	—		1		1,186			—			1,187			—			1,187
Syndication and offering costs	—		—		(11,429		)	—			(11,429		)	—			(11,429		)
Equity compensation to executives and directors	—		—		140			—			140			—			140
Conversion of Class A Units to Common Stock	—		—		—			—			—			—			—
Current period amortization of Class B Units	—		—		—			—			—			811			811
Net income (loss)	—		—		—			(5,138		)	(5,138		)	(140		)	(5,278		)
Reallocation adjustment to non-controlling interests	—		—		746			—			746			(746		)	—
Distributions to non-controlling interests	—		—		—			—			—			(274		)	(274		)
Dividends to series A preferred stockholders
($5.00 per share per month)	—		—		(25,606		)	5,073			(20,533		)	—			(20,533		)
Dividends to mShares preferred stockholders
($4.79 - $6.25 per share per month)	—		—		(456		)	65			(391		)	—			(391		)
Dividends to common stockholders ($0.255 per share)	—		—		(10,104		)	—			(10,104		)	—			(10,104		)
Balance at June 30, 2018	$	14	$	397	$	1,430,713		$	—		$	1,431,124		$	2,353		$	1,433,477

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Preferred Apartment Communities, Inc.
Condensed Consolidated Statements of Stockholders' Equity
For the six-month period ended June 30, 2019
(Unaudited)
(In thousands, except dividend per-share figures)	Series A and Series M Redeemable Preferred Stock		Common Stock		Additional Paid in Capital			Accumulated Earnings			Total Stockholders' Equity			Non-Controlling Interest			Total Equity
Balance at January 1, 2019	$	16	$	418	$	1,607,712		$	—		$	1,608,146		$	1,239		$	1,609,385
Issuance of Units	3		—		252,589			—			252,592			—			252,592
Issuance of mShares	—		—		29,609			—			29,609			—			29,609
Redemptions of Series A Preferred Stock	—		17		(5,128		)	—			(5,111		)	—			(5,111		)
Exercises of warrants	—		6		7,586			—			7,592			—			7,592
Syndication and offering costs	—		—		(30,242		)	—			(30,242		)	—			(30,242		)
Equity compensation to executives and directors	—		—		316			—			316			—			316
Conversion of Class A Units to Common Stock	—		1		564			—			565			(565		)	—
Current period amortization of Class B Units	—		—		—			—			—			301			301
Net income (loss)	—		—		—			(3,878		)	(3,878		)	(79		)	(3,957		)
Reallocation adjustment to non-controlling interests	—		—		926			—			926			(926		)	—
Distributions to non-controlling interests	—		—		—			—			—			(458		)	(458		)
Dividends to series A preferred stockholders
($5.00 per share per month)	—		—		(54,984		)	3,744			(51,240		)	—			(51,240		)
Dividends to mShares preferred stockholders
($4.79 - $6.25 per share per month)	—		—		(1,975		)	134			(1,841		)	—			(1,841		)
Dividends to common stockholders ($0.5225 per share)	—		—		(22,776		)	—			(22,776		)	—			(22,776		)
Balance at June 30, 2019	$	19	$	442	$	1,784,197		$	—		$	1,784,658		$	(488	)	$	1,784,170

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Preferred Apartment Communities, Inc.
Condensed Consolidated Statements of Stockholders' Equity, continued
For the six-month period ended June 30, 2018
(Unaudited)
(In thousands, except dividend per-share figures)	Series A and Series M Redeemable Preferred Stock		Common Stock		Additional Paid in Capital			Accumulated Earnings			Total Stockholders' Equity			Non-Controlling Interest			Total Equity
Balance at January 1, 2018	$	12	$	386	$	1,271,040		$	4,449		$	1,275,887		$	4,879		$	1,280,766
Issuance of Units	2		—		210,842			—			210,844			—			210,844
Issuance of mShares	—		—		13,569			—			13,569			—			13,569
Redemptions of Series A Preferred Stock	—		4		(9,063		)	—			(9,059		)	—			(9,059		)
Exercises of Warrants	—		6		8,371			—			8,377			—			8,377
Syndication and offering costs	—		—		(21,201		)	—			(21,201		)	—			(21,201		)
Equity compensation to executives and directors	—		—		278			—			278			—			278
Conversion of Class A Units to Common Stock	—		1		850			—			851			(851		)	—
Current period amortization of Class B Units	—		—		—			—			—			1,807			1,807
Net income (loss)	—		—		—			8,745			8,745			240			8,985
Reallocation adjustment to non-controlling interests	—		—		3,180			—			3,180			(3,180		)	—
Distributions to non-controlling interests	—		—		—			—			—			(542		)	(542		)
Dividends to Series A preferred stockholders
($5.00 per share per month)	—		—		(26,772		)	(12,965		)	(39,737		)	—			(39,737		)
Dividends to mShares preferred stockholders
($4.79 - $6.25 per share per month)	—		—		(475		)	(229		)	(704		)	—			(704		)
Dividends to common stockholders ($0.505 per share)	—		—		(19,906		)	—			(19,906		)	—			(19,906		)
Balance at June 30, 2018	$	14	$	397	$	1,430,713		$	—		$	1,431,124		$	2,353		$	1,433,477

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

Preferred Apartment Communities, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)	Six Months Ended June 30,
	2019			2018
Operating activities:
Net (loss) income	$	(3,957	)	$	8,985
Reconciliation of net (loss) income to net cash provided by operating activities:
Depreciation and amortization expense	90,952			82,711
Amortization of above and below market leases	(3,179		)	(2,387		)
Deferred revenues and fee income amortization	(2,782		)	(2,154		)
Purchase option termination fee amortization	(5,617		)	(2,236		)
Noncash interest income amortization on MBS, net of amortized costs	(415		)	(54		)
Amortization of market discount on assumed debt and lease incentives	991			699
Deferred loan cost amortization	3,139			3,279
(Increase) in accrued interest income on real estate loan investments	(4,416		)	(5,261		)
Equity compensation to executives and directors	617			2,085
Gains on sales of real estate and trading investment	(4		)	(20,356		)
Cash received for purchase option terminations	1,330			5,100
Loss on extinguishment of debt	69			—
Gain on sale of real estate loan investment	(747		)	—
Mortgage interest received from consolidated VIEs	8,015			861
Mortgage interest paid to other participants of consolidated VIEs	(8,015		)	(861		)
Changes in operating assets and liabilities:
(Increase) in tenant receivables and other assets	(11,306		)	(1,718		)
(Increase) in tenant lease incentives	(314		)	(4,972		)
Increase in accounts payable and accrued expenses	11,691			7,474
(Decrease) increase in accrued interest, prepaid rents and other liabilities	(1,416		)	1,968
Net cash provided by operating activities	74,636			73,163
Investing activities:
Investments in real estate loans	(53,497		)	(117,771		)
Repayments of real estate loans	—			130,185
Notes receivable issued	(4,792		)	(716		)
Notes receivable repaid	10			8,640
Note receivable issued to and draws on line of credit by related parties	(22,766		)	(24,093		)
Repayments of line of credit by related parties	16,103			18,652
Origination fees received on real estate loan investments	1,051			2,422
Origination fees paid to Manager on real estate loan investments	(526		)	(1,211		)
Purchases of mortgage-backed securities (K program), net of acquisition costs	(18,656		)	(4,739		)
Mortgage principal received from consolidated VIEs	2,073			171
Purchases of mortgage-backed securities	(12,278		)	—
Proceeds from sales of mortgage-backed securities	53,445			—
Acquisition of properties	(154,579		)	(405,870		)
Disposition of properties, net	—			42,269
Receipt of insurance proceeds for capital improvements	746			412
Additions to real estate assets - improvements	(20,647		)	(18,268		)
Deposits (paid) on acquisitions	(8,202		)	(1,538		)
Net cash used in investing activities	(222,515		)	(371,455		)
Financing activities:
Proceeds from mortgage notes payable	145,861			211,949
Repayments of mortgage notes payable	(57,318		)	(35,231		)
Payments for deposits and other mortgage loan costs	(3,267		)	(4,359		)
Proceeds from real estate loan participants	—			5
Payments to real estate loan participants	(5,223		)	(3,664		)
Proceeds from lines of credit	162,200			237,100
Payments on lines of credit	(219,200		)	(240,400		)
Repayment of the Term Loan	—			(11,000		)
Mortgage principal paid to other participants of consolidated VIEs	(2,073		)	(171		)
Proceeds from repurchase agreements	4,857			—
Repayments of repurchase agreements	(4,857		)	—
Proceeds from sales of Units, net of offering costs	257,466			204,201
Proceeds from exercises of Warrants	7,433			12,374
The accompanying notes are an integral part of these condensed consolidated financial statements.

8

Preferred Apartment Communities, Inc.
Condensed Consolidated Statements of Cash Flows - continued
(unaudited)
	Six Months Ended June 30,
	2019			2018
Payments for redemptions of preferred stock	(5,115		)	(8,994		)
Common Stock dividends paid	(22,036		)	(19,378		)
Preferred stock dividends paid	(51,655		)	(39,310		)
Distributions to non-controlling interests	(457		)	(489		)
Payments for deferred offering costs	(1,868		)	(2,068		)
Net cash provided by financing activities	204,748			300,565
Net increase (decrease) in cash, cash equivalents and restricted cash	56,869			2,273
Cash, cash equivalents and restricted cash, beginning of year	87,690			73,012
Cash, cash equivalents and restricted cash, end of period	$	144,559		$	75,285
Supplemental cash flow information:
Cash paid for interest	$	49,961		$	38,875
Supplemental disclosure of non-cash investing and financing activities:
Accrued capital expenditures	$	5,294		$	1,621
Writeoff of fully depreciated or amortized assets and liabilities	$	182		$	245
Writeoff of fully amortized deferred loan costs	$	541		$	1,331
Lessee-funded tenant improvements, capitalized as landlord assets	$	—		$	7,490
Consolidation of assets of VIEs	$	270,670		$	262,965
Consolidation of liabilities of VIEs	$	270,670		$	262,965
Sales of real estate loan investments	$	763		$	—
Dividends payable - Common Stock	$	11,581		$	10,104
Dividends payable - Series A Preferred Stock	$	9,009		$	6,952
Dividends payable - mShares Preferred Stock	$	625		$	129
Dividends declared but not yet due and payable	$	210		$	153
Partnership distributions payable to non-controlling interests	$	230		$	273
Accrued and payable deferred offering costs	$	731		$	415
Offering cost reimbursement to related party	$	256		$	966
Reclass of offering costs from deferred asset to equity	$	5,508		$	1,053
Loan receivables converted to equity for property acquisition	$	47,797		$	—
Fair value issuances of equity compensation	$	719		$	4,972
Mortgage loans assumed on acquisitions	$	41,550		$	47,125
Noncash repayment of mortgages through refinancings	$	24,477		$	37,485

The accompanying notes are an integral part of these condensed consolidated financial statements.

9

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements

June 30, 2019

(unaudited)

1. Organization and Basis of Presentation

Preferred Apartment Communities, Inc. is a Maryland corporation formed primarily to own and operate multifamily properties and, to a lesser extent, own and operate student housing properties, grocery-anchored shopping centers and strategically located, well leased class A office buildings, all in select targeted markets throughout the United States.  As part of our business strategy, we may enter into forward purchase contracts or purchase options for to-be-built multifamily communities and we may make real estate related loans, provide deposit arrangements, or provide performance assurances, as may be necessary or appropriate, in connection with the development of multifamily communities.  As a secondary strategy, we may acquire or originate senior mortgage loans, subordinate loans or real estate loans secured by interests in multifamily properties, membership or partnership interests in multifamily properties and other multifamily related assets and invest a lesser portion of our assets in other real estate related investments, including other income-producing property types, senior mortgage loans, subordinate loans or real estate loans secured by interests in other income-producing property types, membership or partnership interests in other income-producing property types as determined by our manager as appropriate for us.  At December 31, 2018, the Company was the approximate 97.9% owner of Preferred Apartment Communities Operating Partnership, L.P., the Company's operating partnership. Preferred Apartment Communities, Inc. has elected to be taxed as a real estate investment trust under the Internal Revenue Code of 1986, as amended, commencing with its tax year ended December 31, 2011. The Company is externally managed and advised by Preferred Apartment Advisors, LLC, or its Manager, a Delaware limited liability company and related party (see Note 6).

As of June 30, 2019, the Company had 44,246,703 shares of common stock, par value $0.01 per share, or Common Stock, issued and outstanding and was the approximate 98.1% owner of the Operating Partnership at that date. The number of partnership units not owned by the Company totaled 874,937 at June 30, 2019 and represented Class A OP Units of the Operating Partnership, or Class A OP Units. The Class A OP Units are convertible at any time at the option of the holder into the Operating Partnership's choice of either cash or Common Stock. In the case of cash, the value is determined based upon the trailing 20-day volume weighted average price of the Company's Common Stock.

The Company controls the Operating Partnership through its sole general partner interest and conducts substantially all of its business through the Operating Partnership. The Company has determined the Operating Partnership is a variable interest entity, or VIE, of which the Company is the primary beneficiary. The Company is involved with other VIEs, such as through its investments in mortgage pools from the Freddie Mac K Program, as discussed in Note 4. New Market Properties, LLC owns and conducts the business of our portfolio of grocery-anchored shopping centers. Preferred Office Properties, LLC owns and conducts the business of our portfolio of office buildings. Preferred Campus Communities, LLC owns and conducts the business of our portfolio of off-campus student housing communities (see Note 16). Each of these entities are wholly-owned subsidiaries of the Operating Partnership.

Basis of Presentation

These consolidated financial statements include all of the accounts of the Company and the Operating Partnership presented in accordance with accounting principles generally accepted in the United States of America, or GAAP. The year end condensed balance sheet data was derived from audited financial statements, but does not contain all the disclosures required by GAAP. All significant intercompany transactions have been eliminated in consolidation. Certain adjustments have been made consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair presentation of the Company's financial condition and results of operations. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Amounts are presented in thousands where indicated.

As permitted by the practical expedient within ASC 842, Leases, the Company has elected to report the lease component and non-lease components as one single component within the line entitled Rental Revenues on the Company's Consolidated Statements of Operations. Reimbursement revenue was previously presented in the Company’s Other Property Revenues line item. For presentation purposes, the Company has reclassified its revenue from reimbursements from the Other Property Revenues line into the Rental Revenues line for all periods presented.

10

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

2. Summary of Significant Accounting Policies

Variable Interest Entities

A variable interest entity, or “VIE” is an entity that lacks sufficient equity to finance its activities without additional subordinated financial support from other parties, or whose equity holders lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary, which is defined as the party who has a controlling financial interest in the VIE through the (a) power to direct the activities of the VIE that most significantly affect the VIE’s economic performance, and (b) obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. The Company assesses whether it meets the power and benefits criteria and in performing this analysis, the Company considers both qualitative and quantitative factors, including the Company’s ability to control or significantly influence key decisions of the VIE and the obligation or likelihood for the Company to fund operating losses of the VIE. The determination of whether an entity is a VIE, and whether the Company is the primary beneficiary, may involve significant judgment, including the determination of which activities most significantly affect the entities’ performance, and estimates about the current and future fair values and performance of assets held by the VIE. If the Company determines that it meets both the power and benefits criteria of the VIE, the Company is deemed to be the primary beneficiary of the VIE and the Company consolidates the entire VIE entity in its consolidated financial statements. For those VIEs which arise from the Company's investment in mortgage-backed securities and which the Company consolidates, it elects the fair value option, under which the assets and liabilities of the consolidated VIE are carried at fair value. The periodic changes in fair value are included in the earnings of the Company and are reported on the line entitled Change in fair value of net assets of consolidated VIE from mortgage-backed pool on the Company's Consolidated Statements of Operations. See Note 4 for discussion related to the Company’s investments in subordinate tranches of collateralized mortgage-backed pools and Note 15 for fair value disclosures related to a consolidated VIE related to these investments.

Real Estate Loans

The Company carries its investments in real estate loans at amortized cost with assessments made for possible loan loss allowances in the event recoverability of the principal amount becomes doubtful. If, upon testing for possible loan loss allowances, the fair value result of the loan or its collateral is lower than the carrying amount of the loan, an allowance is recorded to lower the carrying amount to fair value, with a loss recorded in earnings. The balances of real estate loans presented on the consolidated balance sheets consist of drawn amounts on the loans, net of unamortized deferred loan origination fees and loan loss allowances.

Interest income on real estate loans and notes receivable is recognized on an accrual basis over the lives of the loans or notes. In the event that a loan or note is refinanced with the proceeds of another loan issued by the Company, any unamortized loan fee revenue from the first loan will be recognized as interest revenue at the date of refinancing. Loan origination fees applicable to real estate loans are amortized over the lives of the loans as adjustments to interest income using the effective interest rate method. The accrual of interest on all these instruments ceases when there is concern as to the ultimate collection of principal or interest. Certain real estate loan assets include limited purchase options and either exit fees or additional amounts of accrued interest. Exit fees or accrued interest due will be treated as additional consideration for the acquired project if the Company purchases the subject property. Additional accrued interest becomes due in cash to the Company on the earliest to occur of: (i) the maturity of the loan, (ii) any uncured event of default as defined in the associated loan agreement, (iii) the sale of the project or the refinancing of the loan (other than a refinancing loan by the Company or one of its affiliates) and (iv) any other repayment of the loan.

Evaluations for the possible need for loan loss allowances are performed for each real estate loan investment at least quarterly. Loan loss allowances are needed when it is deemed probable that all amounts due will not be collected according to the contractual terms of the loan. Depending upon the circumstances and significance of risk related to the collectability of the loan, management may determine that (i) the loan should be accounted for as a non-accrual loan because recovery of all contractual amounts due are deemed improbable and that any amounts subsequently received will be used to reduce the loan’s principal balance, (ii) in the event of a modification to the loan granted by the Company as a concession to the borrower who is experiencing financial difficulty, result in the need to apply troubled debt restructuring (“TDR”) accounting guidance, and/or (iii) an allowance for loan loss is required for the loan based upon the value of the underlying collateral and the Company’s evaluation of a possible shortfall with regards to the loan’s repayment based upon an estimated sales price, additional costs (if necessary), estimated selling costs, and amounts due to all lenders.

In connection with the surveillance review process, the Company’s real estate loan investments are assigned an internal risk rating. The internal risk ratings are based on the loan’s current status as compared to underwriting for certain metrics such as total expected construction cost if overruns are noted, construction completion timing if there are delays, current cap rates within the

11

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

MSA, leasing status, rental rates, net operating income, expected free cash flow, and other factors management deems important related to the ultimate collectability of the loan. The final internal risk ratings are influenced by other quantitative and qualitative factors that can result in an adjustment to the ratings. Each loan is given an internal risk rating from “A” to “D”.  Loans rated an “A” meet all present contractual obligations and there are no indicators which would cause concern for the borrower’s ability to meet all present contractual obligations. Loans rated a “B” meet all present contractual obligations, but exhibited at least one indication of a negative variation from the underwriting for the loan and/or project. Loans rated a “C” exhibit some weakness that deserves management’s close attention and if uncorrected, may result in deterioration of repayment prospects. For these loans, management performs analyses to verify the borrower’s ability to meet all present contractual obligations, including obtaining an appraisal of the underlying collateral for the loan. Based on the available collateral to satisfy the Company’s outstanding principal and interest contractually due, we may provide for an allowance, move the loan to non-accrual status for future interest recognition or continue monitoring the loan. For loans rated a “D”, the collection of all contractual principal and interest is improbable and management has determined to account for the loan as a non-accrual loan and, if appropriate under the circumstances record a loan loss allowance.

The Company's real estate loan investments are collateralized by real estate development projects and secured further by guaranties of repayment from one or more of the borrowers. The Company's lines of credit receivable are typically only collateralized by personal guaranties, but occasionally may be cross-collateralized by interests in other real estate projects. As a result, the Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property, as well as the financial and operating capability of the borrower. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan, and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, the overall economic environment, real estate sector, and geographic sub‑market in which the borrower operates are considered. Such impairment analyses are completed and reviewed by management, utilizing various data sources, including periodic financial data such as property operating statements, occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, capitalization and discount rates and site inspections.

See the Revenue Recognition section of this Note for other loan-related policy disclosures required by ASC 310-10-50-6.

Purchase Option Terminations

The Company will occasionally receive a purchase option on the underlying property in conjunction with extending a real estate loan investment to the developer of the property. The purchase option is often at a discount to the to-be-agreed-upon market value of the property, once stabilized. If the Company elects not to exercise the purchase option and acquire the property, it may negotiate to sell the purchase option back to the developer and receive a termination fee in consideration. The amount of the termination fee is accounted for as additional interest on the real estate loan investment and is recognized as interest revenue utilizing the effective interest method over the period beginning from the date of election until the earlier of (i) the maturity of the real estate loan investment and (ii) the sale of the property.

Revenue Recognition

Multifamily communities and student housing properties

Rental revenue is recognized when earned from residents of the Company's multifamily communities, which is over the terms of the rental agreements, typically of 9 to 15 months’ duration. The Company evaluates the collectability of amounts due from residents and recognizes revenue from residents when collectability is deemed probable, in accordance with ASC 842-30-25-12. The Company disclosed bad debt expense within the Property Operating and Maintenance expense line item in prior periods, but recorded the reduction in revenue against Rental Revenues and Other Property Revenues, as applicable, for the current period.

The Company evaluated the various ancillary revenues within its multifamily leases, including resident utility reimbursements. Having met the criteria that (i) the timing and pattern of transfer for the lease component and associated non-lease components are the same and (ii) that the lease component, if accounted for separately would be classified as an operating lease, the Company has elected the practical expedient under Lease Accounting, ASC 842, paragraph 10-15-42A, to elect reporting the lease component and non-lease components as one single component under Rental Revenues recognized in accordance with ASC 842. Lease components such as pet rental fees and parking rental fees as well as non-lease components such as utility reimbursements were previously presented in the Company’s Other Property Revenues line item. For presentation purposes, the Company has reclassified

12

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

its revenue from these revenue sources into Rental Revenues for all periods presented, for comparability. Revenue from utility reimbursements are considered variable lease payments and are recognized in the period in which the related expenses are incurred.

Grocery-anchored shopping centers and office properties

Our retail leases have original lease terms which generally range from three to seven years for spaces under 5,000 square feet and from 10 to 20 years for spaces over 10,000 square feet. Anchor leases generally contain renewal options for one or more additional periods whereas in-line tenant leases may or may not have renewal options. With the exception of anchor leases, the leases generally contain contractual increases in base rent rates over the lease term and the base rent rates for renewal periods are generally based upon the rental rate for the primary term, which may be adjusted for inflation or market conditions. Anchor leases generally do not contain contractual increases in base rent rates over the lease term and the renewal periods. Our leases generally provide for the payment of fixed monthly rentals and may also provide for the payment of additional rent based upon a percentage of the tenant’s gross sales above a certain threshold level (“percentage rent”). Our leases also generally include tenant reimbursements for common area expenses, insurance, and real estate taxes. Utilities are generally paid by tenants either directly through separate meters or through payment of tenant reimbursements. The foregoing general description of the characteristics of the leases in our centers is not intended to describe all leases and material variations in lease terms may exist.

Our office building leases have original lease terms which generally range from 5 to 15 years and generally contain contractual, annual base rental rate escalations ranging from 2% to 3%. These leases may be structured as gross where the tenant’s base rental rate is all inclusive and there is no additional obligation to reimburse building operating expenses, net or NNN where in addition to base rent the tenant is also responsible for its pro rata share of reimbursable building operating expenses, or modified gross where in addition to base rent the tenant is also responsible for its pro rata share of reimbursable building operating expense increases over a base year amount (typically calculated as the actual reimbursable operating expenses in year one of the original lease term).

Base rental revenue from tenants' operating leases is a lease component revenue in the Company's grocery-anchored shopping centers and office properties and is recognized on a straight-line basis over the term of the lease. Revenue based on "percentage rent" provisions that provide for additional rents that become due upon achievement of specified sales revenue targets (as specified in each lease agreement) is recognized only after the tenant exceeds its specified sales revenue target. Revenue from reimbursements of the tenants' share of real estate taxes, insurance and common area maintenance, or CAM, costs represent non-lease component revenue. Having met the criteria that (i) the timing and pattern of transfer for the lease component and associated non-lease components are the same and (ii) that the lease component, if accounted for separately would be classified as an operating lease, the Company has elected the practical expedient under ASC 842, Leases, paragraph 10-15-42A, to elect reporting the lease component and non-lease components as one single component under Rental Revenues recognized in accordance with ASC 842. Reimbursement revenue and percentage rent were previously presented in the Company’s Other Property Revenues line item. For presentation purposes, the Company has reclassified its revenue from reimbursements into Rental Revenues for all periods presented, for comparability. Revenue from reimbursements are considered variable lease payments and are recognized in the period in which the related expenses are incurred. The Company does not record income and offsetting expense for certain variable costs paid directly to third parties by lessees on behalf of lessors.

Non-lease components which do not qualify under the practical expedient primarily include percentage rent, lease termination income and other ancillary revenue (e.g. storage revenue, license fees, late fees, tenant billbacks). These items are recorded under Other property revenues. Lease termination revenues are recognized ratably over the revised remaining lease term after giving effect to the termination notice or when tenant vacates and the Company has no further obligations under the lease. Rents and tenant reimbursements collected in advance are recorded as prepaid rent within other liabilities in the accompanying consolidated balance sheets. The Company evaluated the collectability of the tenant receivable related to rental and reimbursement billings due from tenants and straight-line rent receivables, which represent the cumulative amount of future adjustments necessary to present rental revenue on a straight-line basis, by taking into consideration the Company's historical write-off experience, tenant credit-worthiness, current economic trends, and remaining lease terms. The Company evaluates the collectability of these amounts and recognizes revenue related to tenants where collectability is deemed probable, in accordance with ASC 842-30-25-12. The Company previously recorded bad debt expense within the Property operating and maintenance expense line item, and upon adoption of ASC 842 on January 1, 2019, began recording amounts not deemed probable of collection as a reduction of rental revenues and other property revenues, as applicable.

The Company may provide grocery-anchored shopping center and office building tenants an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and depreciated over the shorter of the useful life of the improvements or the remaining lease term. If the allowance represents a payment for a purpose other than funding leasehold

13

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

improvements, or in the event the Company is not considered the owner of the improvements, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of rental revenue. Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease. When the Company is the owner of the leasehold improvements, recognition of rental revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date is the date the tenant obtains possession of the leased space for purposes of constructing its leasehold improvements. For our office properties, if the improvement is deemed to be a “landlord asset,” and the tenant funded the tenant improvements, the cost is amortized over the term of the underlying lease with a corresponding recognition of rental revenues. In order to qualify as a landlord asset, the specifics of the tenant’s assets are reviewed, including the Company's approval of the tenant’s detailed expenditures, whether such assets may be usable by other future tenants, whether the Company has consent to alter or remove the assets from the premises and generally remain the Company's property at the end of the lease.

Gains on sales of real estate assets

The Company recognizes gains on sales of real estate based on the difference between the consideration received and the carrying amount of the distinct asset, including the carrying amount of any liabilities relieved or assumed by the purchasing counterparty and net of disposition expenses.

Lessee accounting

The Company has evaluated its leases for which it is the lessee to determine the value of any right of use assets and related lease liabilities. The Company has three ground leases related to our office and grocery-anchored shopping center assets, one of which had been recorded at fair value on the Company's balance sheet at acquisition due to a purchase option the Company deemed probable of exercising. These ground leases generally have extended terms (e.g. over 20 years with multiple renewal options) and generally have base rent with CPI-based increases. The Company evaluated its renewal option periods in quantifying its asset and liability related to these ground leases. In determining the value of its right of use asset and lease liability, the Company used discount rates comparable to recent loan rates obtained on comparative properties within its portfolio. The Company’s right of use asset and related lease liability in accordance with ASC 842-20-30 related to these ground leases are recorded within the Tenant Receivables and Other Assets and the Security Deposits and Other Liabilities line items of the balance sheet, respectively. The Company is also the lessee of furniture and equipment leases such as office equipment, which generally are three to five years with minimal rent increases. The Company determined that the related right of use asset and lease liability for its furniture and equipment leases were immaterial.

14

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

New Accounting Pronouncements

Standard	Description	Date of Adoption	Effect on the Consolidated Financial Statements
Recently Adopted Accounting Guidance
ASU 2016-02, Leases (Topic 842) ASU 2018-11, Leases (Topic 842) Targeted Improvements	ASU 2016-02 requires a lessor to separate lease components from non-lease components, such as maintenance services or other activities that transfer a good or service to our residents and tenants in a contract. In July 2018, the FASB issued ASU 2018-11 which allowed for a practical expedient for lessors to elect, by class of underlying assets, to not separate lease and non-lease components if both (1) the timing and pattern of revenue recognition are the same for the non-lease component(s) and related lease component and (2) the combined single lease component would be classified as an operating lease. Additional practical expedients were also provided for under ASU 2018-11 related to expired or existing leases.	January 1, 2019	Having met the criteria that (i) the timing and pattern of transfer for the lease component and associated non-lease components are the same and (ii) that the lease component, if accounted for separately would be classified as an operating lease, the Company has elected the practical expedient within ASU 2018-11, as codified under ASC 842-10-15-42A, to elect reporting the lease component and non-lease components as one single component under Rental Revenues recognized in accordance with ASC 842. This change had no material effect on the timing of revenue recognition. The Company has also elected to implement the package of practical expedients provided within ASU 2018-11, as codified under ASC 842-10-65-1(f), which allows the Company not to reassess whether expired or existing contracts contain leases, its lease classification, and any related initial direct costs.
ASU 2018-20, Leases (ASC 842), Narrow-Scope Improvements for Lessors	ASU 2018-20 eliminates the requirement to record income and offsetting expense for certain variable costs paid for by lessees on behalf of lessors.	January 1, 2019	The Company no longer records income and expense for property taxes paid directly to the taxing authority by a lessee based on this standard. The effect is a reduction of other property revenues and of property tax expense, with no effect upon net income/loss.
Recently Issued Accounting Guidance Not Yet Adopted
ASU 2016-13, Financial Instruments - Credit Losses (ASC 326)	ASU 2016-03 changes how entities will measure credit losses for most financial assets, including loans, which are not measured at fair value through net income. The guidance replaces the existing incurred loss model with an expected loss model for instruments measured at amortized cost, and require entities to record credit allowances for financial assets rather than reduce the carrying amount, as they do today under the other-than temporary impairment model.	January 1, 2020	We are currently evaluating the potential impacts of the new guidance and proposed amendments to the new guidance on our consolidated financial statements. The new guidance specifically excludes financial assets measured at fair value through net income. The Company elected the fair value option for its Freddie Mac K Program investments. Therefore, we expect the impact of the new guidance on accounting for financial assets will be limited to our real estate investment loans and notes and revolving lines of credit. We expect to implement this new guidance using the modified retrospective basis by recording a cumulative effect adjustment to retained earnings on January 1, 2020.

15

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

3. Real Estate Assets

The Company's real estate assets consisted of:

	As of:
	June 30, 2019	December 31, 2018
Multifamily communities:
Properties (1)	32	32
Units	9,768	9,768
New Market Properties: (2)
Properties	49	45
Gross leasable area (square feet) (3)	5,412,328	4,730,695
Student housing properties:
Properties	8	7
Units	2,011	1,679
Beds	6,095	5,208
Preferred Office Properties:
Properties	7	7
Rentable square feet	2,578,000	2,578,000
(1) The acquired second phases of CityPark View and Crosstown Walk communities are managed in combination with the initial phases and so together are considered a single property, as are the Lenox Village and Regent at Lenox Village assets within the Lenox Portfolio.
(2) See Note 13, Segment information.
(3) The Company also owns approximately 47,600 square feet of gross leasable area of ground floor retail space which is embedded within the Lenox Portfolio and is not included in the totals above for New Market Properties.

Multifamily communities sold

The Company had no sales of multifamily community assets during the six-month period ended June 30, 2019.

On March 20, 2018, the Company closed on the sale of its 328-unit multifamily community in Raleigh, North Carolina, or Lake Cameron, to an unrelated third party for a purchase price of approximately $43.5 million, exclusive of closing costs, and debt defeasance-related costs and resulted in a gain of $20.4 million. Lake Cameron contributed approximately $0.2 million of net income to the consolidated operating results of the Company for the six-month period ended June 30, 2018.

16

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

The carrying amounts of the significant assets and liabilities of the disposed property at the date of sale were:

	Lake Cameron
(in thousands)	June 30, 2018
Real estate assets:
Land	$	4,000
Building and improvements	21,519
Furniture, fixtures and equipment	3,687
Accumulated depreciation	(7,220		)
Total assets	$	21,986
Liabilities:
Mortgage note payable	$	19,736
Supplemental mortgage note	—
Total liabilities	$	19,736

Multifamily communities acquired

The Company had no acquisitions of multifamily community assets during the six-month period ended June 30, 2019.

During the six-month period ended June 30, 2018, the Company completed the acquisition of the following multifamily communities:

Acquisition date	Property	Location	Units
1/9/2018	The Lux at Sorrel	Jacksonville, Florida	265
2/28/2018	Green Park	Atlanta, Georgia	310
			575

The aggregate purchase prices of the multifamily acquisitions for the six-month period ended June 30, 2018 were approximately $106.5 million, exclusive of acquired escrows, security deposits, prepaids, capitalized acquisition costs and other miscellaneous assets and assumed liabilities.

17

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

The Company allocated the purchase prices and capitalized acquisition costs to the acquired assets and liabilities based upon their fair values, as shown in the following table. The purchase price allocations were based upon the Company's best estimates of the fair values of the acquired assets and liabilities.

	Multifamily Communities acquired during the six-month period ended:
(in thousands, except amortization period data)	June 30, 2018
Land	$	12,810
Buildings and improvements	73,773
Furniture, fixtures and equipment	17,969
Lease intangibles	4,306
Prepaids & other assets	193
Accrued taxes	(166		)
Security deposits, prepaid rents, and other liabilities	(183		)
Net assets acquired	$	108,702
Cash paid	$	37,427
Mortgage debt, net	71,275
Total consideration	$	108,702
Three-month period ended June 30, 2019:
Revenue	$	2,567
Net income (loss)	$	(1,032	)
Six-month period ended June 30, 2019:
Revenue	$	5,124
Net income (loss)	$	(2,332	)
Capitalized acquisition costs incurred by the Company	$	2,347
Acquisition costs paid to related party (included above)	$	1,094
Remaining amortization period of intangible
assets and liabilities (months)	0

Student housing properties acquired

During the six-month periods ended June 30, 2019 and 2018, the Company completed the acquisition of the following student housing properties:

Acquisition date	Property	Location	Units	Beds
3/27/2019	Haven49 (1)	Charlotte, NC	322	887
5/10/2018	The Tradition	College Station, TX	427	808
5/31/2018	The Retreat at Orlando	Orlando, FL	221	894
6/27/2018	The Bloc	Lubbock, TX	140	556
			788	2,258
(1) The Company effectuated the acquisition via a negotiated agreement whereby the Company accepted the membership interest in the Haven49 project entity in satisfaction of the project indebtedness owed to the Company. See Note 4.

The aggregate purchase price of the student house property acquisition for the six-month period ended June 30, 2019 was approximately $92.4 million. The aggregate purchase price of the student housing property acquisitions for the six-month periods

18

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

ended June 30, 2018 was approximately $197.0 million. Purchase prices shown are exclusive of acquired escrows, security deposits, prepaid assets, capitalized acquisition costs and other miscellaneous assets and assumed liabilities.

The Company allocated the assets' fair value and capitalized acquisition costs to the acquired assets and liabilities based upon their fair values, as shown in the following table. The purchase price allocations were based upon the Company's best estimates of the fair values of the acquired assets and liabilities.

	Student housing properties acquired during the six-month periods ended:
(in thousands, except amortization period data)	June 30, 2019			June 30, 2018
Land	$	7,289		$	23,149
Buildings and Improvements	68,163			146,856
Furniture, fixtures and equipment	16,966			27,211
Lease intangibles	983			2,493
Below market leases	—			(54		)
Prepaids & Other Assets	—			309
Accrued taxes	(158		)	(942		)
Security Deposits, Prepaid Rents, and other liabilities	(2,579		)	(719		)
Net Assets Acquired	$	90,664		$	198,303
Satisfaction of loan receivables	$	46,397		$	—
Cash paid	2,717			92,212
Mortgage debt, net	41,550			106,091
Total consideration	$	90,664		$	198,303
Three-month period ended June 30, 2019:
Revenue	$	1,534		4,289
Net income (loss)	$	(1,653	)	(1,614		)
Six-month period ended June 30, 2019:
Revenue	1,615			8,603
Net income (loss)	(1,924		)	(4,053		)
Capitalized acquisition costs incurred by the Company	$	1,016		$	2,555
Acquisition costs to related party	$	936		$	1,970
Remaining amortization period of intangible
assets and liabilities (months)	0.5			0

19

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

New Market Properties assets acquired

During the six-month periods ended June 30, 2019 and 2018, the Company completed the acquisition of the following grocery-anchored shopping centers:

Acquisition date	Property	Location	Gross leasable area (square feet)
1/17/2019	Gayton Crossing	Richmond, Virginia	158,316
5/28/2019	Free State Shopping Center	Washington, D.C.	264,152
6/12/2019	Disston Plaza	Tampa - St. Petersburg, Florida	129,150
6/12/2019	Polo Grounds Mall	West Palm Beach, Florida	130,015
			681,633
4/27/2018	Greensboro Village	Nashville, Tennessee	70,203
4/27/2018	Governors Towne Square	Atlanta, Georgia	68,658
6/26/2018	Neapolitan Way	Naples, Florida	137,580
6/29/2018	Conway Plaza	Orlando, Florida	117,705
			394,146

The aggregate purchase price of the New Market Properties acquisitions for the six-month period ended June 30, 2019 was approximately $149.3 million. The aggregate purchase price of the New Market Properties acquisitions for the six-month period ended June 30, 2018 was approximately $84.6 million. Purchase prices shown are exclusive of acquired escrows, security deposits, prepaid assets, capitalized acquisition costs and other miscellaneous assets and assumed liabilities.

20

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

The Company allocated the purchase prices to the acquired assets and liabilities based upon their fair values, as shown in the following table. The purchase price allocation was based upon the Company's best estimates of the fair values of the acquired assets and liabilities.

	New Market Properties' acquisition during the six-month periods ended:
(in thousands, except amortization period data)	June 30, 2019			June 30, 2018
Land	$	45,188		$	24,504
Buildings and improvements	89,680			50,086
Tenant improvements	5,897			4,018
In-place leases	13,111			6,177
Above market leases	2,045			1,383
Leasing costs	5,097			2,011
Below market leases	(9,066		)	(2,765		)
Other assets	97			—
Security deposits, prepaid rents, and other	(604		)	(792		)
Net assets acquired	$	151,445		$	84,622
Cash paid	$	55,282		$	54,914
Mortgage debt	96,163			29,708
Total consideration	$	151,445		$	84,622
Three-month period ended June 30, 2019:
Revenue	$	1,583		$	1,923
Net income (loss)	$	(329	)	$	(159	)
Six-month period ended June 30, 2019:
Revenue	$	2,178		$	4,083
Net income (loss)	$	(469	)	$	(188	)
Capitalized acquisition costs incurred by the Company	$	2,921		$	1,221
Capitalized acquisition costs paid to related party (included above)	$	1,535		$	869
Remaining amortization period of intangible
assets and liabilities (years)	8.8			5.9

Preferred Office Properties assets acquired

The Company had no acquisitions of office building assets during the six-month period ended June 30, 2019.

On January 29, 2018, the Company acquired Armour Yards, a collection of four adaptive re-use office buildings comprised of approximately 187,000 square feet of office space in Atlanta, Georgia. The aggregate purchase price was approximately $66.5 million, exclusive of acquired escrows, security deposits, prepaids, capitalized acquisition costs and other miscellaneous assets and assumed liabilities.

The Company allocated the purchase price and capitalized acquisition costs to the acquired assets and liabilities based upon their fair values, as shown in the following table. The purchase price allocations were based upon the Company's best estimates of the fair values of the acquired assets and liabilities.

21

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

	Preferred Office Properties' acquisition during the six-month period ended:
(in thousands, except amortization period data)	June 30, 2018
Land	$	6,756
Buildings and improvements	48,332
Tenant improvements	6,201
In-place leases	3,762
Above-market leases	61
Leasing costs	2,181
Below-market leases	(1,594		)
Security deposits, prepaid rents, and other liabilities	(4,335		)
Net assets acquired	$	61,364
Cash paid	$	21,364
Mortgage debt, net	40,000
Total consideration	$	61,364
Three-month period ended June 30, 2019:
Revenue	$	1,588
Net income (loss)	$	2
Six-month period ended June 30, 2019:
Revenue	$	3,123
Net income (loss)	$	(4	)
Capitalized acquisition costs incurred by the Company	$	817
Acquisition costs paid to related party (included above)	$	665
Remaining amortization period of intangible
assets and liabilities (years)	7.1

The Company recorded aggregate amortization and depreciation expense of:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Depreciation:
Buildings and improvements	$	24,190	$	18,356	$	47,177	$	35,834
Furniture, fixtures, and equipment	12,532		11,398		25,665		21,910
	36,722		29,754		72,842		57,744
Amortization:
Acquired intangible assets	8,617		12,209		17,563		24,709
Deferred leasing costs	276		105		453		196
Website development costs	48		27		94		62
Total depreciation and amortization	$	45,663	$	42,095	$	90,952	$	82,711

At June 30, 2019, the Company had recorded acquired gross intangible assets of $270.4 million, and accumulated amortization of $131.9 million, gross intangible liabilities of $71.4 million and accumulated amortization of $19.6 million. Net intangible assets and liabilities as of June 30, 2019 will be amortized over weighted average remaining amortization periods of approximately 7.9 years and 9.4 years, respectively.

At June 30, 2019, the Company had restricted cash of approximately $14.2 million that was contractually restricted to fund capital expenditures and other property-level commitments such as tenant improvements and leasing commissions.

22

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

Purchase Options

In the course of extending real estate loan investments for property development, the Company will often receive an exclusive option to purchase the property once development and stabilization are complete. If the Company determines that it does not wish to acquire the property, it has the right to sell its purchase option back to the borrower for a termination fee in the amount of the purchase option discount.

Effective January 1, 2019, the Company terminated its purchase options on the Sanibel Straights, Newbergh, Wiregrass and Cameron Square multifamily communities and the Solis Kennesaw student housing property, all of which are partially supported by real estate loan investments held by the Company. In exchange, the Company will receive termination fees aggregating approximately $7.9 million from the developers. These fees are treated as additional interest revenue and are amortized over the period ending with the earlier of (i) the sale of the underlying property and (ii) the maturity of the real estate loans. For the six-month period ended June 30, 2019, the Company recorded approximately $2.3 million of interest revenue related to these 2019 purchase option terminations in addition to approximately $3.3 million of interest revenue for the 464 Bishop and Haven49 purchase options that terminated in the second quarter 2018.

4. Real Estate Loans, Notes Receivable, and Line of Credit

Our portfolio of fixed rate, interest-only real estate loans consisted of:

(Dollars in thousands)	June 30, 2019			December 31, 2018
Number of loans	20			19
Drawn amount	$	362,045		$	336,329
Deferred loan origination fees	(1,865		)	(2,118		)
Carrying value	$	360,180		$	334,211
Unfunded loan commitments	$	81,017		$	164,913
Weighted average current interest, per annum (paid monthly)	8.48		%	8.47		%
Weighted average accrued interest, per annum	4.02		%	5.34		%

(Dollars in thousands)	Principal balance			Deferred loan origination fees			Loan loss allowance		Carrying value
Balances as of December 31, 2018	$	336,329		$	(2,118	)	$	—	$	334,211
Loan fundings	53,497			—			—		53,497
Loans settled with acquisitions	(27,781		)	—			—		(27,781		)
Loan origination fees collected	—			(526		)	—		(526		)
Amortization of loan origination fees	—			779			—		779
Balances as of June 30, 2019	$	362,045		$	(1,865	)	$	—	$	360,180

Property type	Number of loans	Carrying value		Commitment amount		Percentage of portfolio
(Dollars in thousands)
Multifamily communities	15	$	306,351	$	370,563	84	%
Student housing properties	3	37,851		40,448		11	%
New Market Properties	1	12,857		12,857		4	%
Preferred Office Properties	1	3,121		19,193		1	%
Balances as of June 30, 2019	20	$	360,180	$	443,061

23

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

Effective June 30, 2019, the Company amended and sold its senior construction loan on the 8West office development to a third party and collected a gross fee of $1.55 million from the buyer.

The Company's Palisades real estate loan investment was subject to a loan participation agreement with an unaffiliated third party, under which the syndicate was to fund approximately 25% of the loan commitment amount and collectively receive approximately 25% of interest payments, returns of principal and purchase option discount (if applicable). On March 13, 2019, the Company repurchased the loan participant's 25% balance in the loan from the loan participant and at June 30, 2019, carried the entire loan balance on its consolidated balance sheet without reflection of any liability to any third party.

The Company's real estate loan investments are collateralized by 100% of the membership interests of the underlying project entity, and, where considered necessary, by unconditional joint and several repayment guaranties and performance guaranties by the principal(s) of the borrowers. These guaranties generally remain in effect until the receipt of a final certificate of occupancy. All of the guaranties are subject to the rights held by the senior lender pursuant to a standard intercreditor agreement. Prepayment of the real estate loans are permitted in whole, but not in part, without the Company's consent.

Management monitors the credit quality of the obligors under each of the Company's real estate loans by tracking the timeliness of scheduled interest and principal payments relative to the due dates as specified in the loan documents, as well as draw requests on the loans relative to the project budgets. In addition, management monitors the actual progress of development and construction relative to the construction plan, as well as local, regional and national economic conditions that may bear on our current and target markets. The credit quality of the Company’s borrowers is primarily based on their payment history on an individual loan basis, and the Company assigns risk ratings to its real estate loans and notes receivable in credit quality categories as described in Note 2.

The Company continues to monitor each loan and note receivable for potential deterioration of risk ratings and can make no assurances that economic or industry conditions or other circumstances     will not lead to future loan loss allowances.

At June 30, 2019, the Company's portfolio of real estate loan investments by credit quality indicator was:

(In thousands)
Rating indicator	Principal balance		Accrued interest		Receivables for purchase option terminations		Total
A	$	317,619	$	20,688	$	7,900	$	346,207
B	38,310		2,510		—		40,820
C	6,116		1,208		—		7,324
D	—		—		—		—
	$	362,045	$	24,406	$	7,900	$	394,351

24

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

At June 30, 2019, our portfolio of notes and lines of credit receivable consisted of:

Borrower	Date of loan	Maturity date	Total loan commitments		Outstanding balance as of:						Interest rate
					June 30, 2019			December 31, 2018
(Dollars in thousands)
Preferred Capital Marketing Services, LLC (1)	1/24/2013	12/31/2019	$	1,500	$	686		$	763		10	%
Preferred Apartment Advisors, LLC (1,2)	8/21/2012	12/31/2019	22,000		16,842			9,778			7.5	%	(3)
Haven Campus Communities, LLC (1,4)	6/11/2014	12/31/2018	11,660		8,374			11,620			8	%
Oxford Capital Partners, LLC (5)	10/5/2015	6/30/2020	8,000		6,589			4,022			12	%
Newport Development Partners, LLC	6/17/2014	6/30/2020	2,000		1,529			—			12	%
Mulberry Development Group, LLC (6)	3/31/2016	6/30/2020	750		455			465			12	%
360 Capital Company, LLC (6)	5/24/2016	12/31/2019	3,400		3,292			3,100			12	%
360 Capital Company, LLC (1,7)	7/24/2018	12/31/2020	8,000		7,426			6,923			8.5	%
Haven Campus Communities Charlotte Member, LLC (1)	8/31/2018	N/A	—		—			10,788			15	%
Unamortized loan fees					(51		)	(152		)
			$	57,310	$	45,142		$	47,307
(1) See related party disclosure in Note 6.
(2) The amounts payable under this revolving credit line were collateralized by an assignment of the Manager's rights to fees due under the Sixth Amended and Restated Management Agreement between the Company and the Manager, or the Management Agreement.
(3) Effective January 1, 2019, the interest rate was increased from 6.0% per annum to 7.5% per annum and the maturity date was extended to December 31, 2019.
(4) The amount payable under this note is collateralized by one of the principals of the borrower's 49.49% interest in an unrelated shopping center located in Atlanta, Georgia and a personal guaranty of repayment by the principals of the borrower.
(5) The amounts payable under the terms of this revolving credit line, up to the lesser of 25% of the loan balance or $2.0 million, are collateralized by a personal guaranty of repayment by the principals of the borrower.
(6) The amounts payable under the terms of these revolving credit lines are collateralized by a personal guaranty of repayment by the principals of the borrower.
(7) The amount payable under the note is collateralized by the developer's interest in the Fort Myers multifamily community project and a personal guaranty of repayment by the principals of the borrower.

On March 27, 2019, the Company entered into a negotiated agreement with the borrowers of the Haven Campus Communities, LLC and Haven Campus Communities Charlotte Member, LLC lines of credit, both of which were in default as of December 31, 2018. The Company received the membership interests of the Haven49 project in exchange for complete settlement of the Haven Campus Communities Charlotte Member, LLC line of credit and the Haven49 mezzanine and member loans. As part of the agreement, payments and credits totaling approximately $3.3 million were applied against the outstanding balance of the Haven Campus Communities, LLC line of credit. The Company retains a pledge of a 49.49% interest in an unrelated shopping center located in Atlanta, Georgia as additional collateral on the Haven Campus Communities, LLC line of credit.

25

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

The Company recorded interest income and other revenue from these instruments as follows:

Interest income	Three months ended June 30,				Six months ended June 30,
(in thousands)	2019		2018		2019		2018
Real estate loans:
Current interest payments	$	7,479	$	8,686	$	14,948	$	17,191
Additional accrued interest	3,184		5,469		6,569		10,195
Origination fee amortization	465		607		780		1,038
Purchase option termination fee amortization	1,383		2,470		5,617		2,470
Total real estate loan revenue	12,511		17,232		27,914		30,894
Interest income on notes and lines of credit	925		800		2,414		1,703
Interest income from money market accounts	280		—		280		—
Interest income from agency mortgage-backed securities	9		—		207		—
Interest income on loans and notes receivable	$	13,725	$	18,032	$	30,815	$	32,597

The Company extends loans for purposes such as to partially finance the development of multifamily residential communities, to acquire land in anticipation of developing and constructing multifamily residential communities, and for other real estate or real estate related projects. Certain of these loans include characteristics such as exclusive options to purchase the project within a specific time window following project completion and stabilization, the sufficiency of the borrowers' investment at risk and the existence of payment and performance guaranties provided by the borrowers, any of which can cause the loans to create variable interests to the Company and require further evaluation as to whether the variable interest creates a VIE, which would necessitate consolidation of the project.

The Company considers the facts and circumstances pertinent to each entity borrowing under the loan, including the relative amount of financing the Company is contributing to the overall project cost, decision making rights or control held by the Company, guarantees provided by third parties, and rights to expected residual gains or obligations to absorb expected residual losses that could be significant from the project. If the Company is deemed to be the primary beneficiary of a VIE, consolidation treatment would be required.

The Company has no decision making authority or power to direct activity, except normal lender rights, which are subordinate to the senior loans on the projects. The Company has concluded that it is not the primary beneficiary of the borrowing entities and therefore it has not consolidated these entities in its consolidated financial statements. The Company's maximum exposure to loss from these loans is their drawn amount as of June 30, 2019 of approximately $362.0 million. The maximum aggregate amount of loans to be funded as of June 30, 2019 was approximately $443.1 million, which includes approximately $81.0 million of loan committed amounts not yet funded.

The Company has evaluated its real estate loans, where appropriate, for accounting treatment as loans versus real estate development projects, as required by ASC 310. For each loan, the characteristics and the facts and circumstances indicate that loan accounting treatment is appropriate.

The Company is also subject to a geographic concentration of risk that could be considered significant with regard to the 464 Bishop, Dawsonville Marketplace, Falls at Forsyth, Newbergh, Newbergh Capital, Solis Kennesaw, Solis Kennesaw Capital, Solis Kennesaw II, and 8West, all of which are partially supporting various real estate projects in or near Atlanta, Georgia. The drawn amount of these loans as of June 30, 2019 totaled approximately $97.9 million (with a total commitment amount of approximately $119.4 million) and in the event of a total failure to perform by the borrowers and guarantors, would subject the Company to a total possible loss of the drawn amount.

Freddie Mac K Program investments

On May 23, 2018, the Company purchased a subordinate tranche of Series 2018-ML04, a pool of 20 multifamily mortgages with a total pool size of approximately $276.3 million, from Freddie Mac. The purchase price of the subordinate tranche was approximately $4.7 million and has a weighted average maturity of approximately 16 years, at which time the Company will collect the face value of its tranche of $27.6 million. The yield to maturity of the subordinate tranche is expected to be approximately 11.5% per annum.

26

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

On March 28, 2019, the Company purchased a subordinate tranche of Series 2019-ML05, a pool of 21 multifamily mortgages with a total pool size of approximately $295.7 million, from Freddie Mac. The Company's tranche of the 2019-ML05 pool pays monthly interest of approximately $103,000. The purchase price of the subordinate tranche was approximately $18.4 million and has a weighted average maturity of approximately 16.1 years, at which time the Company will collect the face value of its tranche of $29.6 million. The yield to maturity of the subordinate tranche is expected to be approximately 8.9% per annum.

The Company has evaluated the structure of the investments under the VIE rules and has determined that, due to the Company's position as directing certificate holder of the two mortgage pools, it is in the position most able to influence the financial performance of the trusts. As the subordinate tranche holder, the Company also holds the first loss position of the mortgage pools. As such, the Company is deemed to be the primary beneficiary of the VIEs and has consolidated the assets, liabilities, revenues, expenses and cash flows of both trusts in its consolidated financial statements as of and for the three-month period ended June 30, 2019. The Company's maximum exposure to loss from the combined mortgage pools from the Freddie Mac K program is approximately $24.1 million. The Company has no recourse liability to either the creditors or other beneficial interest holders of either investment.

Agency Mortgage-Backed Securities investments

In December 2018, the Company began investing in Agency Mortgage-Backed Securities representing undivided (or “pass-through”) beneficial interests in specified pools of fixed-rate mortgage loans. The investments are classified as trading securities. On December 20, 2018, the Company sold its entire position of a pool with associated premium amounts totaling $41.1 million. At December 31, 2018, the Company held a receivable related to this sale transaction of $41.2 million, which was collected upon the settlement of the transaction in January 2019. Additionally, for the six-months ended June 30, 2019, the Company recorded approximately $207,000 in interest income related to these investments.

5. Redeemable Preferred Stock and Equity Offerings

At June 30, 2019, the Company's active equity offerings consisted of:

• an offering of a maximum of 1,500,000 Units, with each Unit consisting of one share of Series A Redeemable Preferred Stock and one Warrant to purchase up to 20 shares of Common Stock (the "$1.5 Billion Unit Offering");

• an offering of up to a maximum of 500,000 shares of Series M Redeemable Preferred Stock (“mShares”), par value $0.01 per share (the “mShares Offering”); and

• an offering of up to $400 million of equity or debt securities (the "2019 Shelf Offering"), including an offering of up to $125 million of Common Stock from time to time in an "at the market" offering (the "2019 ATM Offering").

Certain offering costs are not related to specific closing transactions and are recognized as a reduction of stockholders' equity in the proportion of the number of instruments issued to the maximum number of Units anticipated to be issued. Any offering costs not yet reclassified as reductions of stockholders' equity are are reflected in the asset section of the consolidated balance sheets as deferred offering costs.

27

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

As of June 30, 2019, cumulative gross proceeds and offering costs for our active equity offerings consisted of:

(In thousands)							Deferred Offering Costs
Offering	Total offering				Gross proceeds as of June 30, 2019		Reclassified as reductions of stockholders' equity				Recorded as deferred assets		Total		Specifically identifiable offering costs (1)		Total offering costs
$1.5 Billion Unit Offering	$	1,500,000			$	939,340	$	6,014	75	%	$	1,989	$	8,003	$	88,498	$	96,501
mShares Offering	500,000				73,835		2,782		74	%	985		3,767		2,909		6,676
2016 Shelf Offering	300,000		(3	)	98,080		2,062		100	%	—		2,062		3,001		5,063
2019 Shelf Offering	400,000		(2	)	—		—		—	%	710		710		—		710
Total	$	2,700,000			$	1,111,255	$	10,858			$	3,684	$	14,542	$	94,408	$	108,950

⁽¹⁾ These offering costs specifically identifiable to Unit offering closing transactions, such as commissions, dealer manager fees, and other registration fees, are reflected as a reduction of stockholders' equity at the time of closing.

⁽²⁾ On April 25, 2019, the Company's 2019 Shelf Registration Statement was declared effective.

⁽³⁾ The $300 million 2016 Shelf Offering expired in second quarter 2019, and therefore all remaining deferred offering costs were reclassified as reductions of stockholder's equity.

Aggregate offering expenses of the $1.5 Billion Unit Offering, including selling commissions and dealer manager fees, and of the mShares Offering, including dealer manager fees, are each individually capped at 11.5% of the aggregate gross proceeds of the two offerings, of which the Company will reimburse its Manager up to 1.5% of the gross proceeds of such offerings for all organization and offering expenses incurred, excluding selling commissions and dealer manager fees for the $1.5 Billion Unit Offering and excluding dealer manager fees for the mShares Offering; however, upon approval by the conflicts committee of the board of directors, the Company may reimburse its Manager for any such expenses incurred above the 1.5% amount as permitted by the Financial Industry Regulatory Authority, or FINRA.

6. Related Party Transactions

On April 16, 2018, John A. Williams, the Company's Chief Executive Officer and Chairman of the Board, passed away. The Company's Haven 12 real estate loan investment and Haven Campus Communities LLC line of credit are both supported in part by a guaranty of repayment and performance by John A. Williams, Jr., John A. Williams' son. Because the terms of these loans were negotiated and agreed upon while John A. Williams was the Chief Executive Officer of the Company, these instruments will continue to be reported as related party transactions until the loans are repaid. The Company named Daniel M. DuPree as Chairman of the Board of Directors and Chief Executive Officer of the Company. Leonard A. Silverstein was named Vice Chairman of the Board of Directors and continues as the Company's President and Chief Operating Officer.

On March 27, 2019, the Company's Haven49 and Haven49 Member real estate loan investments and the Haven Campus Communities Charlotte Member LLC line of credit were deemed satisfied in full in connection with the Company's acceptance of the borrowers' membership interests in the underlying Haven49 project.

Mr. Silverstein is an executive officer and Messrs. DuPree and Silverstein are also directors of NELL Partners, Inc., which controls the Manager. Mr. DuPree is the Chief Executive Officer and Mr. Silverstein is the President and Chief Operating Officer of the Manager.

The Company's Wiregrass and Wiregrass Capital real estate loan investments are partially financing the development of a multifamily community in Tampa, Florida by the Altman Companies. Timothy A. Peterson is a member of management of the Altman Companies as well as Chairman of the Audit Committee of the Company's Board of Directors. The Wiregrass loans therefore qualify as related party transactions.

28

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

The Management Agreement entitles the Manager to receive compensation for various services it performs related to acquiring assets and managing properties on the Company's behalf:

(In thousands)		Three-month periods ended June 30,				Six-month periods ended June 30,
Type of Compensation	Basis of Compensation	2019		2018		2019		2018
Acquisition fees	1.0% of the gross purchase price of real estate assets	$	1,203	$	2,861	$	2,603	$	4,620
Loan origination fees	1.0% of the maximum commitment of any real estate loan, note or line of credit receivable	125		411		526		1,211
Loan coordination fees	0.6% of any assumed, new or supplemental debt incurred in connection with an acquired property	621		814		965		1,554
Asset management fees	Monthly fee equal to one-twelfth of 0.50% of the total book value of assets, as adjusted	3,840		3,600		7,565		7,265
Property management fees	Monthly fee up to 4% of the monthly gross revenues of the properties managed	2,495		2,148		4,951		4,241
General and administrative expense fees	Monthly fee equal to 2% of the monthly gross revenues of the Company	1,581		1,535		3,067		2,968
Construction management fees	Quarterly fee for property renovation and takeover projects	78		142		136		273
Disposition fees	1% of the sale price of a real estate asset	16		—		16		435
		$	9,959	$	11,511	$	19,829	$	22,567

The Manager may, in its discretion, waive some or all of the asset management, property management, or general and administrative fees in the current period for properties owned by the Company. The waived fees may become earned by the Manager as an additional disposition fee only in the event of a sales transaction, and whereby the Company’s capital contributions for the property being sold exceed a 7% annual rate of return. The Company will recognize in future periods to the extent, if any, it determines that the sales transaction is probable, and that the estimated net sale proceeds would exceed the annual rate of return hurdle. A cumulative total of approximately $18.1 million of combined asset management and general and administrative fees related to acquired properties as of June 30, 2019 have been waived by the Manager. A total of $16.6 million remaining waived fees could possibly be earned by the Manager in the future.

In addition to property management fees, the Company incurred the following reimbursable on-site personnel salary and related benefits expenses at the properties, which are listed on the Consolidated Statements of Operations:

(in thousands)
Three-month periods ended June 30,				Six-month periods ended June 30,
2019		2018		2019		2018
$	4,213	$	3,930	$	8,292	$	7,539

The Manager utilizes its own and its affiliates' personnel to accomplish certain tasks related to raising capital that would typically be performed by third parties, including, but not limited to, legal and marketing functions. As permitted under the Management Agreement, the Manager was reimbursed $256,162 and $238,538 for the six-month periods ended June 30, 2019 and 2018,

29

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

respectively and Preferred Capital Securities, LLC, or PCS, was reimbursed $680,116 and $727,601 for the six-month periods ended June 30, 2019 and 2018 , respectively. These costs are recorded as deferred offering costs until such time as additional closings occur on the $1.5 Billion Unit Offering, mShares Offering or the 2019 Shelf Offering, at which time they are reclassified on a pro-rata basis as a reduction of offering proceeds within stockholders’ equity.

The Company pays its Manager leasing commission fees for office and retail leases based on varying rates and conditions. These fees totaled $30,000 and $0 for the three-month periods ended June 30, 2019 and 2018 respectively and $53,000 and $9,000 for the six-month periods ended June 30, 2019 and 2018 respectively.

The Company holds a promissory note in the amount of approximately $686,000 due from Preferred Capital Marketing Services, LLC, or PCMS, which is a wholly-owned subsidiary of NELL Partners.

The Company has extended a revolving line of credit with a maximum borrowing amount of $22.0 million to its Manager.

7. Dividends and Distributions

The Company declares and pays monthly cash dividend distributions on its Series A Preferred Stock in the amount of $5.00 per share per month and beginning in March 2017, on its Series M Preferred Stock, on an escalating scale of $4.79 per month in year one, increasing to $6.25 per month in year eight and beyond. All preferred stock dividends are prorated for partial months at issuance as necessary. The Company declared aggregate quarterly cash dividends on its Common Stock of $0.5225 and $0.505 per share for the six-month periods ended June 30, 2019 and 2018, respectively. The holders of Class A OP Units of the Operating Partnership are entitled to equivalent distributions as the dividends declared on the Common Stock. At June 30, 2019, the Company had 874,937 Class A OP Units outstanding, which are exchangeable on a one-for-one basis for shares of Common Stock or the equivalent amount of cash.

The Company's dividend and distribution activity consisted of:

	Dividends and distributions declared
	For the six months ended June 30,
	2019		2018
(in thousands)
Series A Preferred Stock	$	51,240	$	39,737
mShares	1,841		704
Common Stock	22,776		19,906
Class A OP Units	458		540
Total	$	76,315	$	60,887

8. Equity Compensation

Stock Incentive Plan

On May 2, 2019, the Company’s board of directors adopted, and the Company’s stockholders approved, the Preferred Apartment Communities, Inc. 2019 Stock Incentive Plan, or the 2019 Plan, to incentivize, compensate and retain eligible officers, consultants, and non-employee directors. The 2019 Plan increased the aggregate number of shares of Common Stock authorized for issuance under the 2011 Plan from 2,617,500 to 3,617,500. The 2019 Plan does not have a stated expiration date.

30

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

Equity compensation expense by award type for the Company was:

	Three-month period ended June 30,				Six-month period ended June 30,				Unamortized expense as of June 30,
(in thousands)	2019		2018		2019		2018		2019
Class B Unit awards:
2016	$	—	$	74	$	2	148		$	—
2017	78		88		156		195		159
2018	71		648		143		1,464		430
Restricted stock grants:
2017	—		30		—		120		—
2018	30		60		120		60		—
2019	70		—		70		—		350
Restricted stock units:
2017	20		22		38		43		36
2018	21		28		40		55		139
2019	16		—		48		—		238
Total	$	306	$	950	$	617	$	2,085	$	1,352

Restricted Stock Grants

The following annual grants of restricted stock were made to members of the Company's independent directors, as payment of the annual retainer fees. The restricted stock grants vested (or are scheduled to vest) on a pro-rata basis over the four consecutive 90-day periods following the date of grant.

Service year	Shares	Fair value per share		Total compensation cost (in thousands)
2017	24,408	$	14.75	$	360
2018	24,810	$	14.51	$	360
2019	26,446	$	15.88	$	420

31

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

Class B OP Units

As of June 30, 2019, cumulative activity of grants of Class B Units of the Operating Partnership, or Class B OP units, was:

	Grant date
	1/2/2018		1/3/2017
Units granted	256,087		286,392
Units forfeited:
John A. Williams (1)	(38,284	)	—
Voluntary forfeiture by senior executives	(128,258	)	—
Other	(22,722	)	(5,334	)
Total forfeitures	(189,264	)	(5,334	)
Units earned and converted into Class A Units	—		(254,730	)
Class B Units outstanding at June 30, 2019	66,823		26,328
Units unearned but vested	32,575		—
Units unearned and not yet vested	34,248		26,328
Class B Units outstanding at June 30, 2019	66,823		26,328
(1) Pro rata modification of award on April 16, 2018, the date of Mr. Williams' passing.

There were no grants of Class B OP Units for 2019.

The underlying valuation assumptions and results for the 2018 Class B OP Unit awards were:

Grant dates	1/2/2018
Stock price	$	20.19
Dividend yield	4.95		%
Expected volatility	25.70		%
Risk-free interest rate	2.71		%
Number of Units granted:
One year vesting period	171,988
Three year vesting period	84,099
	256,087
Calculated fair value per Unit	$	16.66
Total fair value of Units	$	4,266,409
Target market threshold increase	$	5,660,580

The expected dividend yield assumptions were derived from the Company’s closing prices of the Common Stock on the grant dates and the projected future quarterly dividend payments per share of $0.25 for the 2018 awards.

For the 2018 awards, the Company's own stock price history was utilized as the basis for deriving the expected volatility assumption.

The risk-free rate assumptions were obtained from the Federal Reserve yield table and were calculated as the interpolated rate between the 20 and 30 year yield percentages on U. S. Treasury securities on the grant date.

Since the Class B OP Units have no expiration date, a derived service period of one year was utilized, which equals the period of time from the grant date to the initial valuation date.

32

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

Restricted Stock Units

The Company, through its Operating Partnership, has granted restricted stock units, or RSUs, to certain employees of affiliates of the Company, as shown in the following table:

Grant date	1/2/2019			1/2/2018			1/3/2017
Service period	2019-2021			2018-2020			2017-2019
RSU activity:
Granted	27,760			20,720			26,900
Forfeited	(1,280		)	(3,920		)	(6,674		)
Units earned and converted into common stock	—			—			(14,154		)
RSUs outstanding at June 30, 2019	26,480			16,800			6,072
RSUs unearned but vested	—			5,627			—
RSUs unearned but not yet vested	26,480			11,173			6,072
RSUs outstanding at June 30, 2019	26,480			16,800			6,072
Fair value per RSU	$	10.77		$	16.66		$	11.92
Total fair value of RSU grant	$	298,975		$	345,195		$	320,648

The RSUs vest in three equal consecutive one-year tranches from the date of grant. For each grant, on the Initial Valuation Date, the market capitalization of the number of shares of Common Stock at the date of grant is compared to the market capitalization of the same number of shares of Common Stock at the Initial Valuation Date. If the market capitalization measure results in an increase which exceeds the target market threshold, the Vested RSUs become earned RSUs and automatically convert into Common Stock on a one-to-one basis. Vested RSUs may become Earned RSUs on a pro-rata basis should the result of the market capitalization test be an increase of less than the target market threshold. Any Vested RSUs that do not become Earned RSUs on the Initial Valuation Date are subsequently remeasured on a quarterly basis until such time as all Vested RSUs become Earned RSUs or are forfeited due to termination of continuous service due to an event other than as a result of a qualified event, which is generally the death or disability of the holder. Continuous service through the final valuation date is required for the Vested RSUs to qualify to become fully Earned RSUs.

Because RSUs are valued using the identical market condition vesting requirement that determines the transition of the Vested Class B Units to Earned Class B Units, the same valuation assumptions per RSU were utilized to calculate the total fair values of the RSUs. The total fair value amounts pertaining to grants of RSUs, net of forfeitures, are amortized as compensation expense over the three one-year periods ending on the three successive anniversaries of the grant dates.

33

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

9. Indebtedness

Mortgage Notes Payable

Mortgage Financing of Property Acquisitions

The Company partially financed the real estate properties acquired during the six-month period ended June 30, 2019 with mortgage debt as shown in the following table:

Property	Date	Initial principal amount (in thousands)		Fixed/Variable rate	Rate		Maturity date
Disston Plaza	6/12/2019	$	18,038	Fixed	3.93	%	7/1/2034
Polo Grounds Mall	6/12/2019	13,325		Fixed	3.93	%	7/1/2034
Free State Shopping Center	5/28/2019	46,800		Fixed	3.99	%	6/1/2029
Haven49 (1)	3/27/2019	41,550		Variable	6.15	%	12/22/2019
Gayton Crossing	1/17/2019	18,000		Fixed	4.71	%	2/1/2029
		$	137,713

⁽¹⁾ The Company assumed the existing construction loan on this property.

Repayments and Refinancings

On April 12, 2019, the Company refinanced the mortgage on its Royal Lakes Marketplace grocery-anchored shopping center. The existing $9.5 million mortgage bore interest at a variable rate of 1 month LIBOR plus 250 basis point and was refinanced into a $9.7 million mortgage which bears interest at a fixed rate of 4.29%. As a result of the refinance, the Company incurred approximately $0.3 million of expenses which were capitalized as deferred loan costs, and accelerated approximately $52,000 of remaining unamortized deferred loan costs associated with the prior loan, which is included within the interest expense line of the Consolidated Statements of Operations.

On April 12, 2019, the Company refinanced the mortgage on its Cherokee Plaza grocery-anchored shopping center. The existing $24.5 million mortgage bore interest at a variable rate of 1 month LIBOR plus 225 basis point and was refinanced into a $25.2 million mortgage which bears interest at a fixed rate of 4.28%. As a result of the refinance, the Company expensed approximately $317,000 of loan costs associated with the new loan, which is included within the interest expense line of the Consolidated Statements of Operations.

On February 28, 2019, the Company refinanced the mortgage on its Lenox Village Town Center multifamily community. The existing $29.2 million mortgage bore interest at a fixed rate of 3.82% and was refinanced into a $39.3 million mortgage which bears interest at a fixed rate of 4.34%. As a result of the refinance, the Company incurred approximately $0.6 million of expenses which were capitalized as deferred loan costs, and accelerated approximately $16,000 of remaining unamortized deferred loan costs associated with the prior loan, which is included within the interest expense line of the Consolidated Statements of Operations.

The sale of Lake Cameron on March 20, 2018 resulted in $402,000 of debt defeasance related costs, which were netted against the gain on the sale of the property.

On March 29, 2018, the Company refinanced the mortgage on its Sol student housing property. A short-term bridge loan was used to replace the mortgage being held on the Acquisition Facility. The mortgage principal balance of approximately $37.5 million remained the same under the new financing arrangement, and the existing variable interest rate increased 10 basis points, to 210 basis points over LIBOR. As a result of the refinance, the Company incurred expenses of approximately $41,000, which are included within the Interest Expense line of the Consolidated Statements of Operations.

34

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

The following table summarizes our mortgage notes payable at June 30, 2019:

(dollars in thousands)
Fixed rate mortgage debt:	Principal balances due			Weighted-average interest rate		Weighted average remaining life (years)
Multifamily communities	$	1,032,344		3.92	%	9.4
New Market Properties	552,606			3.93	%	7.6
Preferred Office Properties	484,773			4.32	%	14.6
Student housing properties	160,324			4.13	%	6.1
Total fixed rate mortgage debt	2,230,047			4.02	%	9.9
Variable rate mortgage debt:
Multifamily communities	80,482			4.29	%	4.4
New Market Properties	27,400			5.44	%	2.4
Preferred Office Properties	—			—		—
Student housing properties	131,916			5.98	%	1.1
Total variable rate mortgage debt	239,798			5.35	%	2.4
Total mortgage debt:
Multifamily communities	1,112,826			3.94	%	9.1
New Market Properties	580,006			4.01	%	7.4
Preferred Office Properties	484,773			4.32	%	14.6
Student housing properties	292,240			4.97	%	3.9
Total principal amount	2,469,845			4.15	%	9.1
Deferred loan costs	(35,849		)
Mark to market loan adjustment	(4,754		)
Mortgage notes payable, net	$	2,429,242

The Company has placed interest rate caps on the variable rate mortgages on its Avenues at Creekside and Citi Lakes multifamily communities. Under guidance provided by ASC 815-10, these interest rate caps fall under the definition of derivatives, which are embedded in their debt hosts. Because these interest rate caps are deemed to be clearly and closely related to their debt hosts, bifurcation and fair value accounting treatment is not required.

The mortgage note secured by our Independence Square property is a seven year term with an anticipated repayment date of September 1, 2022. If the Company elects not to pay its principal balance at the anticipated repayment date, the term will be extended for an additional five years, maturing on September 1, 2027. The interest rate from September 1, 2022 to September 1, 2027 will be the greater of (i) the Initial Interest Rate of 3.93% plus 200 basis points or (ii) the yield on the seven year U.S. treasury security rate plus approximately 400 basis points.

The mortgage note secured by our Champions Village property has a maximum commitment of approximately $34.2 million. As of June 30, 2019, the Company has an outstanding principal balance of $27.4 million. Additional advances of the mortgage commitment may be drawn as the Company achieves leasing activity, if elected by the Company. Additional advances are available through October 2019. This mortgage note has a variable interest of the greater of (i) 3.25% or (ii) the sum of the 3.00% plus the LIBOR Rate, which was 5.44% as of June 30, 2019.

As of June 30, 2019, the weighted-average remaining life of deferred loan costs related to the Company's mortgage indebtedness was approximately 9.7 years. Our mortgage notes have maturity dates between October 1, 2019 and June 1, 2054.

35

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

Credit Facility

The Company has a credit facility, or Credit Facility, with KeyBank National Association, or KeyBank, which defines a revolving line of credit, or Revolving Line of Credit, which is used to fund investments, capital expenditures, dividends (with consent of KeyBank), working capital and other general corporate purposes on an as needed basis. On March 23, 2018, the maximum borrowing capacity on the Revolving Line of Credit was increased to $200 million pursuant to an accordion feature. The accordion feature

permits the maximum borrowing capacity to be expanded or contracted without amending any further terms of the instrument. On December 12, 2018, the Fourth Amended and Restated Credit Agreement, or the Amended and Restated Credit Agreement, was amended to extend the maturity to December 12, 2021, with an option to extend the maturity date to December 12, 2022, subject to certain conditions described therein. The Revolving Line of Credit accrues interest at a variable rate of one month LIBOR plus an applicable margin of 2.75% to 3.50% per annum, depending upon the Company’s leverage ratio. The weighted average interest rate for the Revolving Line of Credit was 5.60% for the six-month period ended June 30, 2019. The Amended and Restated Credit Agreement also reduced the commitment fee on the average daily unused portion of the Revolving Line of Credit to 0.25% or 0.30% per annum, depending upon the Company’s outstanding Credit Facility balance.

On May 26, 2016, the Company entered into a $11.0 million interim term loan with KeyBank, or the Interim Term Loan, to partially finance the acquisition of Anderson Central, a grocery-anchored shopping center located in Anderson, South Carolina. The Interim Term Loan accrued interest at a rate of LIBOR plus 2.5% per annum until it was repaid and extinguished during the first quarter of 2018.

The Fourth Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including negative covenants that limit or restrict secured and unsecured indebtedness, mergers and fundamental changes, investments and acquisitions, liens and encumbrances, dividends, transactions with affiliates, burdensome agreements, changes in fiscal year and other matters customarily restricted in such agreements. The amount of dividends that may be paid out by the Company is restricted to a maximum of 95% of AFFO for the trailing four quarters without the lender's consent; solely for purposes of this covenant, AFFO is calculated as earnings before interest, taxes, depreciation and amortization expense, plus reserves for capital expenditures, less normally recurring capital expenditures, less consolidated interest expense.

As of June 30, 2019, the Company was in compliance with all covenants related to the Revolving Line of Credit, as shown in the following table:

Covenant (1)	Requirement		Result
Net worth	Minimum $1.7 billion	(2)	$1.8 billion
Debt yield	Minimum 8.25%		10.24%
Payout ratio	Maximum 95%	(3)	90.8%
Total leverage ratio	Maximum 65%		56.7%
Debt service coverage ratio	Minimum 1.50x		1.84x

⁽¹⁾ All covenants are as defined in the credit agreement for the Revolving Line of Credit.

⁽²⁾ Minimum of $686.9 million plus 75% of the net proceeds of any equity offering, which totaled approximately $1.0 billion as of June 30, 2019.

⁽³⁾ Calculated on a trailing four-quarter basis. For the twelve-month period ended June 30, 2019, the maximum dividends and distributions allowed under this covenant was approximately $151.0 million.

Loan fees and closing costs for the establishment and subsequent amendments of the Credit Facility are amortized utilizing the straight line method over the life of the Credit Facility. At June 30, 2019, unamortized loan fees and closing costs for the Credit Facility were approximately $1.4 million, which will be amortized over a remaining loan life of approximately 2.5 years. Loan fees and closing costs for the mortgage debt on the Company's properties are amortized utilizing the effective interest rate method over the lives of the loans.

Acquisition Facility

On February 28, 2017, the Company entered into a credit agreement, or Acquisition Credit Agreement, with Freddie Mac through KeyBank to obtain an acquisition revolving credit facility, or Acquisition Facility, with a maximum borrowing capacity of $200 million. The purpose of the Acquisition Facility is to finance acquisitions of multifamily communities and student housing communities. The maximum borrowing capacity on the Acquisition Facility may be increased at the Company's request up to $300 million at any time prior to March 1, 2021. On March 25, 2019, the maximum borrowing capacity was decreased to $90 million

36

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

by agreement between the Company and KeyBank.The Acquisition Facility accrues interest at a variable rate of one month LIBOR plus a margin of between 1.75% per annum and 2.20% per annum, depending on the type of assets acquired and the resulting property debt service coverage ratio. The Acquisition Facility has a maturity date of March 1, 2022 and has two one-year extension options, subject to certain conditions described therein. At June 30, 2019, unamortized loan fees and closing costs for the establishment of the Acquisition Facility were approximately $0.2 million, which will be amortized over a remaining loan life of approximately 2.7 years. 

Interest Expense

Interest expense, including amortization of deferred loan costs was:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Multifamily communities	$	11,817	$	11,252	$	23,272	$	22,188
New Market Properties	6,115		4,629		11,701		8,985
Preferred Office Properties	5,357		2,666		10,708		5,207
Student housing properties	4,004		2,384		7,349		4,075
Interest paid to real estate loan participants	—		557		110		944
Total	27,293		21,488		53,140		41,399
Credit Facility and Acquisition Facility	318		859		1,227		1,916
Interest Expense	$	27,611	$	22,347	$	54,367	$	43,315

Future Principal Payments

The Company’s estimated future principal payments due on its debt instruments as of June 30, 2019 were:

Period	Future principal payments (in thousands)
2019	$	119,237
2020	73,063
2021	179,341
2022	219,111
2023	194,072
thereafter	1,685,021
Total	$	2,469,845

10. Income Taxes

The Company elected to be taxed as a REIT effective with its tax year ended December 31, 2011, and therefore, the Company will not be subject to federal and state income taxes, so long as it distributes 100% of the Company's annual REIT taxable income (which does not equal net income as calculated in accordance with GAAP and determined without regard for the deduction for dividends paid and excluding net capital gains) to its stockholders. For the Company's tax years prior to its REIT election year, its operations resulted in a tax loss. As of December 31, 2010, the Company had deferred federal and state tax assets totaling approximately $298,100, none of which were based upon tax positions deemed to be uncertain. These deferred tax assets will most likely not be used since the Company elected REIT status; therefore, management has determined that a 100% valuation allowance is appropriate as of June 30, 2019 and December 31, 2018.

37

11. Commitments and Contingencies

On March 28, 2014, the Company entered into a payment guaranty in support of its Manager's eleven-year office lease, which began on October 9, 2014. As of June 30, 2019, the amount guarantied by the Company was $5.5 million and is reduced by $619,304 per lease year over the term of the lease.

Certain officers and employees of the Manager have been assigned company credit cards. As of June 30, 2019, the Company guarantied up to $640,000 on these credit cards.

The Company is otherwise currently subject to neither any known material commitments or contingencies from its business operations, nor any material known or threatened litigation.

A total of approximately $18.1 million of asset management and general and administrative fees related to acquired properties as of June 30, 2019 have been waived by the Manager.  The waived fees are converted at the time of waiver into contingent fees, which are earned by the Manager as an additional disposition fee only in the event of a sales transaction, and whereby the Company’s capital contributions for the property being sold exceed a 7% annual rate of return.  The Company will recognize in future periods to the extent, if any, it determines that the sales transaction is probable, and that the estimated net sale proceeds would exceed the annual rate of return hurdle.  As of June 30, 2019, a total of $16.6 million remaining waived fees could possibly be earned by the Manager in the future.  

At June 30, 2019, the Company had unfunded balances on its real estate loan portfolio of approximately $81.0 million.

At June 30, 2019, the Company had unfunded contractual commitments for tenant, leasing, and capital improvements of approximately $14.2 million.

12. Operating Leases

The Company’s grocery-anchored shopping centers and office properties are leased to tenants under operating leases for which the terms vary. The future minimum rental income due under the remaining terms of the Company's operating leases in place, excluding tenant reimbursements of operating expenses and real estate taxes and additional percentage rent based on tenants’ sales volumes, as of June 30, 2019, is presented below, assuming that all leases which expire are not renewed and tenant renewal options are not exercised (excludes rental income due from tenants of multifamily communities, which are of lease terms of twelve months or less):

For the year ending December 31:	Future Minimum Rents as of June 30, 2019
(in thousands)	New Market Properties		Preferred Office Properties		Total
2019 (1)	$	33,871	$	28,476	$	62,347
2020	64,188		62,266		126,454
2021	55,988		61,347		117,335
2022	46,983		61,171		108,154
2023	40,038		60,378		100,416
Thereafter	118,010		306,324		424,334
Total	$	359,078	$	579,962	$	939,040
(1) Remaining six months

38

For the year ending December 31:	Future Minimum Rents as of December 31, 2018
(in thousands)	New Market Properties		Preferred Office Properties		Total
2019	$	58,143	$	56,564	$	114,707
2020	51,949		61,704		113,653
2021	43,152		58,805		101,957
2022	35,218		58,108		93,326
2023	29,562		57,343		86,905
Thereafter	79,747		298,469		378,216
Total	$	297,771	$	590,993	$	888,764

The Company’s grocery-anchored shopping centers are geographically concentrated within the Sunbelt and Mid-Atlantic region of the United States. The Company’s retail tenant base primarily consists of national and regional supermarkets, consumer services, healthcare providers, and restaurants. Our grocery anchor tenants comprise approximately 46.1% of our gross leasable area. Our credit risk, therefore, is concentrated in the retail/grocery real estate sector. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, with the exception of our grocer anchor tenants, who generally are not required to provide security deposits. Exposure to credit risk is limited to the extent that tenant receivables exceed security deposits. Security deposits related to tenant leases are included in security deposits and other liabilities in the accompanying consolidated balance sheets.

As of June 30, 2019, the Company’s approximately 2.6 million square foot office portfolio was 96% leased to a predominantly investment grade credit (or investment grade equivalent) tenant roster. For non-credit tenants, our leases typically require a security deposit or letter of credit, which limits worst case collection exposure to amounts in excess of those protections. Additionally, some credit tenant leases will include credit enhancement provisions that require a security deposit or letter of credit in the event of a rating downgrade. We conduct thorough credit analyses not only for leasing activities within our existing portfolio but also for major tenants in properties we are considering acquiring.

13. Segment Information

The Company's Chief Operating Decision Maker, or CODM, evaluates the performance of the Company's business operations and allocates financial and other resources by assessing the financial results and outlook for future performance across five distinct segments: multifamily communities, student housing properties, real estate related financing, New Market Properties and Preferred Office Properties.

Multifamily Communities - consists of the Company's portfolio of owned residential multifamily communities

Student Housing Properties - consists of the Company's portfolio of owned student housing properties.

Financing - consists of the Company's portfolio of real estate loans, bridge loans, and other instruments deployed by the Company to partially finance the development, construction, and prestabilization carrying costs of new multifamily communities and other real estate and real estate related assets. Excluded from the financing segment are consolidated assets of VIEs and financial results of the Company's Dawson Marketplace grocery-anchored shopping center real estate loan, which are included in the New Market Properties segment.

New Market Properties - consists of the Company's portfolio of grocery-anchored shopping centers, which are owned by New Market Properties, LLC, a wholly-owned subsidiary of the Company, as well as the financial results from the Company's grocery-anchored shopping center real estate loans.

Preferred Office Properties - consists of the Company's portfolio of office buildings.

The CODM monitors net operating income (“NOI”) on a segment and a consolidated basis as a key performance measure for its operating segments. NOI is defined as rental and other property revenue from real estate assets plus interest income from its loan portfolio less total property operating and maintenance expenses, property management fees, real estate taxes, property insurance, and general and administrative expenses. The CODM uses NOI as a measure of operating performance because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs, acquisition expenses, and other expenses generally incurred at the corporate level.  

39

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

The following tables present the Company's assets, revenues, and NOI results by reportable segment, as well as a reconciliation from NOI to net income (loss). The assets attributable to 'Other' primarily consist of  deferred offering costs recorded but not yet reclassified as reductions of stockholders' equity and cash balances at the Company and Operating Partnership levels.

(in thousands)	June 30, 2019		December 31, 2018
Assets:
Multifamily communities	$	1,480,775	$	1,503,648
Student housing properties	496,021		411,102
Financing	497,055		448,617
New Market Properties	1,026,418		883,594
Preferred Office Properties	878,848		884,648
Other (1)	601,401		279,349
Consolidated assets	$	4,980,518	$	4,410,958
(1) Other Assets includes $571,999 and $264,886 of assets owned by other pool participants within the Freddie Mac K Program that were consolidated by the Company. The Company's maximum exposure to loss from the combined mortgage pools from the Freddie Mac K Program is approximately $24.1 million.

Total capitalized expenditures (inclusive of additions to construction in progress, but exclusive of the purchase price of acquisitions) for the three-month and six-month periods ended June 30, 2019 and 2018 were as follows:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Capitalized expenditures:
Multifamily communities	$	3,633	$	5,859	$	4,845	$	10,698
Student housing properties	910		927		1,823		1,208
New Market Properties	1,427		1,002		3,004		1,787
Total	$	5,970	$	7,788	$	9,672	$	13,693

Second-generation capital expenditures exclude those expenditures made in our office building portfolio (i) to lease space to "first generation" tenants (i.e. leasing capital for existing vacancies and known move-outs at the time of acquisition), (ii) to bring recently acquired properties up to our Class A ownership standards (and which amounts were underwritten into the total investment at the time of acquisition), (iii) for property redevelopments and repositionings (iv) to newly leased space which had been vacant for more than one year and (v) for building improvements that are recoverable from future operating cost savings.

40

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

Total revenues by reportable segment of the Company were:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Revenues
Rental revenues:
Multifamily communities	$	40,848	$	38,896	$	81,162	$	77,758
Student housing properties	11,433		7,097		21,457		12,766
New Market Properties	22,346		17,567		43,875		34,906
Preferred Office Properties (1)	20,965		12,992		41,336		25,384
Total rental revenues	95,592		76,552		187,830		150,814
Other revenues:
Multifamily communities	1,345		1,436		2,640		2,729
Student housing properties	210		107		404		190
New Market Properties	536		645		1,066		1,221
Preferred Office Properties	1,883		118		2,454		206
Total other revenues	3,974		2,306		6,564		4,346
Financing revenues	13,263		17,531		29,941		31,599
Miscellaneous revenues	1,023		—		1,023		—
Consolidated revenues	$	113,852	$	96,389	$	225,358	$	186,759
(1) Included in rental revenues for our Preferred Office Properties segment is the amortization of deferred revenue for tenant-funded leasehold improvements from a major tenant in our Three Ravinia and Westridge office buildings. As of June 30, 2019, the Company has deferred revenue in an aggregate amount of $47.0 million in connection with such improvements. The remaining balance to be recognized is approximately $41.6 million which is included in the deferred revenues line on the consolidated balance sheets at June 30, 2019. These total costs will be amortized over the lesser of the useful lives of the improvements or the individual lease terms. The Company recorded non-cash revenue of approximately $1.9 million and $1.1 million for the six-month periods ended June 30, 2019 and 2018, respectively.

41

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

	Three-month periods ended June 30,						Six-month periods ended June 30,
(in thousands)	2019			2018			2019			2018
Segment net operating income (Segment NOI)
Multifamily communities	$	24,146		$	22,745		$	48,390		$	46,268
Student housing properties	7,150			3,905			12,241			6,941
Financing	13,286			17,531			29,965			31,599
New Market Properties	16,425			12,812			32,230			25,485
Preferred Office Properties	16,515			9,334			31,320			18,397
Consolidated segment net operating income	77,522			66,327			154,146			128,690
Interest expense:
Multifamily communities	11,816			11,252			23,272			22,188
Student housing properties	4,005			2,384			7,349			4,075
New Market Properties	6,115			4,630			11,701			8,985
Preferred Office Properties	5,357			2,666			10,708			5,207
Financing	318			1,415			1,337			2,860
Depreciation and amortization:
Multifamily communities	18,391			20,320			38,802			42,023
Student housing properties	6,179			7,496			11,633			12,601
New Market Properties	10,632			9,177			20,967			18,057
Preferred Office Properties	10,461			5,102			19,550			10,030
Professional fees	888			769			1,773			1,243
Management fees, net of forfeitures	5,414			5,192			10,614			10,213
Loan loss allowance	—			—			—			—
Equity compensation to directors and executives	306			950			617			2,085
Gain on sale of real estate	—			(2		)	—			(20,356		)
Gain on noncash net assets of consolidated VIEs	(584		)	(54		)	(725		)	(54		)
Gain loss on sale of real estate loan investment	(747		)	—			(747		)	—
Loss on extinguishment of debt	52			—			69			—
Gain on trading investment, net	—			—			(4		)	—
Other	596			308			1,187			548
Net income (loss)	$	(1,677	)	$	(5,278	)	$	(3,957	)	$	8,985

42

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

14. Income (Loss) Per Share

The following is a reconciliation of weighted average basic and diluted shares outstanding used in the calculation of income (loss) per share of Common Stock:

		Three-month periods ended June 30,						Six-month periods ended June 30,
	(in thousands, except per-share figures)	2019			2018			2019			2018
Numerator:
	Operating income before gains on sales of real estate and trading investment	$	24,655		$	17,013		$	49,003		$	31,890
	Gains on sales of real estate and trading investment	—			2			4			20,356
	Operating income	24,655			17,015			49,007			52,246
	Interest expense	27,611			22,347			54,367			43,315
	Change in fair value of net assets of consolidated VIEs from mortgage-backed pools	584			54			725			54
	Loss on extinguishment of debt	(52		)	—			(69		)	—
	Gain on sale of real estate loan investment	747			—			747			—
	Net (loss) income	(1,677		)	(5,278		)	(3,957		)	8,985
	Consolidated net loss (income) attributable to non-controlling interests	571			140			79			(240		)
	Net (loss) income attributable to the Company	(1,106		)	(5,138		)	(3,878		)	8,745
	Dividends declared to preferred stockholders	(27,542		)	(20,924		)	(53,081		)	(40,441		)
	Earnings attributable to unvested restricted stock	(7		)	(6		)	(9		)	(8		)
	Net loss attributable to common stockholders	$	(28,655	)	$	(26,068	)	$	(56,968	)	$	(31,704	)
Denominator:
	Weighted average number of shares of Common Stock - basic	43,703			39,383			43,194			39,241
	Effect of dilutive securities: (D)	—			—			—			—
	Weighted average number of shares of Common Stock - basic and diluted	43,703			39,383			43,194			39,241
	Net loss per share of Common Stock attributable to
	common stockholders, basic and diluted	$	(0.66	)	$	(0.66	)	$	(1.32	)	$	(0.81	)

^(A) The Company's outstanding Class A Units of the Operating Partnership (875 and 1,070 Units at June 30, 2019 and 2018, respectively) contain rights to distributions in the same amount per unit as for dividends declared on the Company's Common Stock. The impact of the Class A Unit distributions on earnings per share has been calculated using the two-class method whereby earnings are allocated to the Class A Units based on dividends declared and the Class A Units' participation rights in undistributed earnings.

^(B) The Company’s shares of Series A Preferred Stock outstanding accrue dividends at an annual rate of 6% of the stated value of $1,000 per share, payable monthly. The Company had 1,829 and 1,418 outstanding shares of Series A Preferred Stock at June 30, 2019 and 2018, respectively. The Company's shares of Series M preferred stock, or mShares, accrue dividends at an escalating rate of 5.75% in year one to 7.50% in year eight and thereafter. The Company had 73 and 29 mShares outstanding at June 30, 2019 and 2018, respectively.

^(C) The Company's outstanding unvested restricted share awards (26 and 25 shares of Common Stock at June 30, 2019 and 2018, respectively) contain non-forfeitable rights to distributions or distribution equivalents. The impact of the unvested restricted share awards on earnings per share has been calculated using the two-class method whereby earnings are allocated to the unvested restricted share awards based on dividends declared and the unvested restricted shares' participation rights in undistributed earnings. Given the Company's unvested restricted share awards are defined as participating securities, the dividends declared for that period are adjusted in determining the calculation of loss per share of Common Stock.

^(D) Potential dilution from (i) warrants outstanding from issuances of Units from our Series A Preferred Stock offerings that are potentially exercisable into 27,246 shares of Common Stock; (ii) 93 Class B Units; (iii) 26 shares of unvested restricted common stock; and (iv) 49 outstanding Restricted Stock Units are excluded from the diluted shares calculations because the effect was antidilutive. Class A Units were excluded from the denominator because earnings were allocated to non-controlling interests in the calculation of the numerator.

43

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

15. Fair Values of Financial Instruments

Fair value is defined as the price at which an asset or liability is exchanged between market participants in an orderly transaction at the reporting date. The Company’s cash equivalents, notes receivable, accounts receivable and payables and accrued expenses all approximate fair value due to their short term nature.

The following tables provide estimated fair values of the Company’s financial instruments. The carrying values of the Company's real estate loans include accrued interest receivable from additional interest or exit fee provisions and are presented net of deferred loan fee revenue, where applicable.

	As of June 30, 2019
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Real estate loans	$	360,180	$	392,279	$	—	$	—	$	392,279
Notes receivable and line of credit receivable	45,143		45,143		—		—		45,143
	$	405,323	$	437,422	$	—	$	—	$	437,422
Financial Liabilities:
Mortgage notes payable	$	2,469,845	$	2,522,323	$	—	$	—	$	2,522,323

	As of December 31, 2018
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Real estate loans (1)	$	334,211	$	366,328	$	—	$	—	$	366,328
Notes receivable and line of credit receivable	47,307		47,307		—		—		47,307
	$	381,518	$	413,635	$	—	$	—	$	413,635
Financial Liabilities:
Mortgage notes payable	$	2,339,752	2,313,405		$	—	$	—	$	2,313,405
Revolving credit facility	57,000		57,000		—		—		57,000
Loan participation obligations	5,181		5,181		—		—		5,181
	$	2,401,933	$	2,375,586	$	—	$	—	$	2,375,586

⁽¹⁾ The carrying value of real estate assets at December 31, 2018 included the Company's balance of the Palisades real estate loan investment, which included the amounts funded by an unrelated participant. On March 13, 2019, the Company repurchased the loan participant's 25% balance in the loan from the loan participant and at June 30, 2019, carried the entire loan balance on its consolidated balance sheet without reflection of any liability to any third party.

The fair value of the real estate loans within the level 3 hierarchy are comprised of estimates of the fair value of the notes, which were developed utilizing a discounted cash flow model over the remaining terms of the notes until their maturity dates and utilizing discount rates believed to approximate the market risk factor for notes of similar type and duration. The fair values also contain a separately-calculated estimate of any applicable additional interest payment due the Company at the maturity date of the loan, based on the outstanding loan balances at June 30, 2019, discounted to the reporting date utilizing a discount rate believed to be appropriate for multifamily development projects.

44

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

The fair values of the fixed rate mortgages on the Company’s properties were developed using market quotes of the fixed rate yield index and spread for 4, 5, 6, 7, 10, 15, 25 and 35 year notes as of the reporting date. The present values of the cash flows were calculated using the original interest rate in place on the fixed rate mortgages and again at the current market rate. The difference between the two results was applied as a fair market adjustment to the carrying value of the mortgages.

The following table presents activity of the two mortgage pools from the Freddie Mac K Programas of and for the six-month period ended June 30, 2019:

	Assets			Liabilities
(in thousands)	Multifamily mortgage loans held in VIEs at fair value			VIE liabilities, at fair value			Net
Balance as of December 31, 2018	$	269,946		$	264,886		$	5,060
Initial consolidation of ML-05 trust:	289,325			270,670			18,655
Gains (losses) included in net income due to change in fair value of net assets of VIE:	38,931			38,516			415
Repayments of underlying mortgage principal amounts and repayments to Class A holders:	(2,073		)	(2,073		)	—
Balance as of June 30, 2019	$	596,129		$	571,999		$	24,130

The changes in the fair value of the net assets of consolidated VIEs from mortgage-backed pools were:

	Three months ended				Six months ended
	June 30,				June 30,
(in thousands)	2019		2018		2019		2018
Interest earned	$	310	$	—	$	310	$	—
Unrealized gain	274		54		415		54
Change in fair value of net assets of consolidated VIEs from mortgage-backed pools	$	584	$	54	$	725	$	54

The following table presents the level 3 input used to calculate the fair value of the consolidated assets and liabilities of the two VIEs:

(in thousands)	Fair value		Valuation methodology	Unobservable input
Assets:
Multifamily mortgage loans held in VIEs at fair value	$	596,129	Discounted cash flow	Discount rate	3.9	%
Liabilities:
VIE liabilities, at fair value	$	571,999	Discounted cash flow	Discount rate	3.9	%

The following tables present the estimated fair values of the consolidated assets and liabilities from the two VIEs for which the Company has elected the fair value option.

	As of June 30, 2019
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
VIE assets from mortgage-backed pools	$	596,129	$	596,129	$	—	$	—	$	596,129
Financial Liabilities:
VIE liabilities from mortgage-backed pools	$	571,999	$	571,999	$	—	$	—	$	571,999

45

Preferred Apartment Communities, Inc.

Notes to Consolidated Financial Statements – (continued)

June 30, 2019

(unaudited)

	December 31, 2018
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
VIE assets from mortgage-backed pools	$	269,946	$	269,946	$	—	$	—	$	269,946
Financial Liabilities:
VIE liabilities from mortgage-backed pools	$	264,886	$	264,886	$	—	$	—	$	264,886

Disclosure guidance under GAAP requires the Company to determine whether the fair value of the financial assets or the fair value of the financial liabilities of the two mortgage pools is more observable. The VIE assets within the two mortgage pools consist of mortgage loans which finance 40 and 20 multifamily communities at June 30, 2019 and December 31, 2018, respectively. The fair value of the VIE assets within the level 3 hierarchy are comprised of the fair value of the mortgages as estimated by the Company, which were developed utilizing a discounted cash flow model over the remaining terms of the mortgages until their maturity dates and utilizing discount rates believed to approximate the market risk factor for instruments of similar type and duration. The fair values of the notes are categorized within the level 3 hierarchy of fair value estimation as the discount rate primary input assumption is unobservable.

16. Subsequent Events

Between July 1, 2019 and July 31, 2019, the Company issued 38,684 Units under its $1.5 Billion Unit Offering and collected net proceeds of approximately $34.8 million after commissions and fees and issued 4,896 shares of Series M Preferred Stock under the mShares offering and collected net proceeds of approximately $4.7 million after commissions and fees.

On July 25, 2019, we acquired CAPTRUST Tower, a class A office building in Raleigh, North Carolina comprising 300,389 rentable square feet.

On July 29, 2019, we refinanced the mortgage on our Citilakes multifamily community from a floating to a fixed interest rate of 3.66%.

On July 29, 2019, we entered into a purchase and sale agreement pursuant to which we will sell six of our student housing properties to a third party. The properties to be sold are North by Northwest, Sol, Stadium Village, Ursa, The Retreat at Orlando and Haven49. A non-refundable security deposit from the purchaser has been deposited into an escrow account and we expect the sale to close during fourth quarter 2019. We expect to realize a book gain on the sale.

On July 31, 2019, we acquired 251 Armour Drive, an approximately 36,000 square foot building adjacent to our 187,000 square foot Armour Yards office portfolio in Atlanta, Georgia.

46

Item  1B. Unresolved Staff Comments

None.

47

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

Significant Developments

During the six-month period ended June 30, 2019, we acquired four grocery-anchored shopping centers and one student housing property.

During the six-month period ended June 30, 2019, we issued 254,753 Units and collected net proceeds of approximately $229.2 million from our $1.5 Billion Unit Offering and issued 29,609 shares of Series M Preferred Stock and and collected net proceeds of approximately $28.7 million from our mShares Offering. Our Preferred Stock offerings and our other equity offerings are discussed in detail in the Liquidity and Capital Resources section of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

In addition, during the six-month period ended June 30, 2019, we issued 586,780 shares of Common Stock upon the exercise of Warrants issued in our offerings of our Series A Redeemable Preferred Stock and collected net proceeds of approximately $7.6 million from those exercises.

Forward-looking Statements

Certain statements contained in this Annual Report on Form 10-K, including, without limitation, statements containing the words "believes," "anticipates," "intends," "expects," "assumes," "goals," "guidance," "trends" and similar expressions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon our current plans, expectations and projections about future events. However, such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following:

•     our business and investment strategy;

•     our projected operating results;

• actions and initiatives of the U.S. Government and changes to U.S. Government policies and the execution and impact of these actions, initiatives and policies;

•     the state of the U.S. economy generally or in specific geographic areas;

•     economic trends and economic recoveries;

• our ability to obtain and maintain financing arrangements, including through Fannie Mae and Freddie Mac;

•     financing and advance rates for our target assets;

•     our expected leverage;

•     changes in the values of our assets;

•     our expected portfolio of assets;

•     our expected investments;

•     interest rate mismatches between our target assets and our borrowings used to fund such investments;

•     changes in interest rates and the market value of our target assets;

•     changes in prepayment rates on our target assets;

•     effects of hedging instruments on our target assets;

•     rates of default or decreased recovery rates on our target assets;

•changes in our operating costs, including real estate taxes, utilities and insurance costs;

•     the degree to which our hedging strategies may or may not protect us from interest rate volatility;

•     impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters;

•     our ability to maintain our qualification as a real estate investment trust, or REIT, for U.S. federal income tax purposes;

•     our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended;

•     the availability of investment opportunities in mortgage-related and real estate-related investments and securities;

•     the availability of qualified personnel;

•     estimates relating to our ability to make distributions to our stockholders in the future;

•     our understanding of our competition;

•     market trends in our industry, interest rates, real estate values, the debt securities markets or the general economy;

• weakness in the national, regional and local economies, which could adversely impact consumer spending and retail sales and in turn tenant demand for space and could lead to increased store closings;

48

• changes in market rental rates;

• changes in demographics (including the number of households and average household income) surrounding our shopping centers;

• adverse financial conditions for grocery anchors and other retail, service, medical or restaurant tenants;

• continued consolidation in the grocery-anchored shopping center sector;

• excess amount of retail space in our markets;

• reduction in the demand by tenants to occupy our shopping centers as a result of reduced consumer demand for certain retail formats;

• the growth of super-centers and warehouse club retailers, such as those operated by Wal-Mart and Costco, and their adverse effect on traditional grocery chains;

• the entry of new market participants into the food sales business, such as Amazon's acquisition of Whole Foods, the growth of online food delivery services and online supermarket retailers and their collective adverse effect on traditional grocery chains;

• our ability to aggregate a critical mass of grocery-anchored shopping centers;

• the impact of an increase in energy costs on consumers and its consequential effect on the number of shopping visits to our centers; and

• consequences of any armed conflict involving, or terrorist attack against, the United States.

Forward-looking statements are found throughout this "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Quarterly Report on Form 10-Q. The reader should not place undue reliance on forward-looking statements, which speak only as of the date of this report. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, or SEC, we do not have any intention or obligation to publicly release any revisions to forward-looking statements to reflect unforeseen or other events after the date of this report. The forward-looking statements should be read in light of the risk factors indicated in the section entitled "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018 and as may be supplemented by any amendments to our risk factors in our subsequent quarterly reports on Form 10-Q and other reports filed with the SEC, which are accessible on the SEC’s website at www.sec.gov.

General

The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our results of operations and financial position. This discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

Industry Outlook

                We believe continued, albeit potentially sporadic, improvement in the United States' economy will continue for 2019, given the continued job growth and improvements in consumer confidence. The presidential administration certainly creates more uncertainty in the direction and trajectory of economic growth. We believe a growing economy, improved job market and increased consumer confidence should help create favorable conditions for the multifamily sector. If the economy continues to improve, we expect current occupancy rates generally to remain stable, on an annual basis, as we believe the current level of occupancy nationwide will be difficult to measurably improve upon.

Multifamily Communities

                The pipeline of new multifamily construction, although increasing nationwide in recent years, may be showing signs of declining going forward, or at least plateauing. The new supply coming on line to date has been generally in line with demand in most of our markets although we have seen some areas where demand is falling short of new supply. Nationally, new multifamily construction is currently at or above average historical levels in most markets. Even with the increase in new supply of multifamily properties, recent job growth and demographic trends have led to reasonable levels of absorption in most of our markets. The absorption rate has led to generally stable occupancy rates with increases in rental rates in most of our markets. We believe the supply of new multifamily construction will not increase dramatically as the constraints in the market (including availability of quality sites and the difficult permitting and entitlement process) will constrain further increases in multifamily supply. We expect that new supply is at or near a peak and these constraints may result in a leveling out or decline in new multifamily “starts” in 2019 and 2020. As an offset, the presidential administration may loosen banking regulation standards, which could cause an increase in available capital for new construction. Any relaxing of these regulations could lead to more capital for new multifamily development and an increase in supply. The cost of private capital, less debt capital available from traditional commercial banks

49

for real estate loans and a softening of the market in some “Gateway” cities have all put pressure on the pricing dynamic in multifamily transactions. This could lead to an increase in capitalization rates and a softening price environment, and if this were to occur, then our pipeline of candidate multifamily property acquisitions with returns meeting our investment objectives may expand. However, it is important to note that, currently, equity capital for multifamily product remains available and has fueled the demand for the product which has led to the recent cap rate compression. Currently, that availability of capital remains strong and the investment market for multifamily remains popular.

               The recent declines in U.S. Treasury yields combined with competitive lender spreads have maintained a favorable borrowing environment for multifamily owners and developers. Given the uncertainty around the world's financial markets, fueled in part by the U.S. President and how his policies may affect domestic and international markets, investors have been wary in their approach to debt markets. Recent US bond market movements have seen rates decline and spreads from the government-sponsored entity, or GSE, lenders have been relatively stable to slightly lower. Other lenders in the market have had generally stable spreads as well. During 2019, we may well see spreads remaining at or near  current levels as the investment community becomes more comfortable with the direction of the market and the US economy. With the recent decrease in U.S. Treasury rates, we expect the market to continue to remain favorable for financing multifamily communities, as the equity and debt markets have generally continued to view the U.S. multifamily sector as a desirable investment. Lending by GSEs could be limited by caps on production or capital retention rates imposed by the Federal Housing and Finance Association, which could lead to higher lending costs, although we expect such higher costs to be offset by increased lending activity by other market participants; however, such other market participants may have increased costs and stricter underwriting criteria. Recently, there has been increased dialog from multiple sources discussing the future of the GSEs. Any change to the structure of the GSEs and their business model could have material impacts on the multifamily debt capital markets generally.

                We believe the combination of a difficult regulatory environment and high underwriting standards for commercial banks will continue to create a choppy market for new construction financing. In addition, we believe the continued hesitance among many prospective homebuyers to believe the net benefits of home ownership are greater than the benefit of the flexibility offered through renting will continue to work in the existing multifamily sector's favor. We also believe there will be a continued boost to demand for multifamily rental housing due to the ongoing entry of the “millennial” generation, the sons and daughters of the babyboom generation, into the workforce. This generation has a higher statistical propensity to rent their home and stay a renter deeper into their life-cycle, resulting in an increase in demand for rental housing. This combination of factors should generally result in gradual increases in market rents, lower concessions and opportunities for increases in ancillary fee income.

Student Housing Properties

                Regarding the student housing industry, the Fall 2019 preleasing numbers are very consistent with last year, which is encouraging considering the roughly 10% increase in anticipated supply this year. Industry reports suggest that nationally, effective rents were up 1.7% as of June, slightly higher than 2018’s growth. The top 10 universities for rent growth are all experiencing growth over 5%, however, nearly all of them have seen little to no new supply as of late. Some university markets are seeing an average increase of 11.4% in off-campus student housing inventory. There were approximately 40,000 student housing beds delivered across the country in the fall of 2018, with a forecast of 47,300 off campus student housing beds for fall of 2019 delivery. This inventory growth, while greater than the two previous years, remains in line with recent levels.

                Industry reports estimate that there will be approximately 22.6 million students enrolled at US colleges by 2026. Industry reports also forecast US enrollment to grow by 1.1% annually from 2018 to 2023, while they estimate that undergraduate college enrollment will grow by an annual average of 1.5% over the next six years. We believe that the primary drivers of expanding enrollment will be moderate job growth, positive 18 to 24 year old population growth, and historically high enrollment rates of 68% to 70% over the next four years among high school graduates.

New Market Properties

               We believe that the grocery-anchored shopping center sector benefits from many of the same improving metrics as the

multifamily sector, namely improved economy and job and wage growth. More specifically, the types of centers we own and plan to acquire are primarily occupied by grocery stores, service uses, fitness centers, medical providers and restaurants. We believe that these businesses are significantly less impacted by e-commerce than some other retail businesses, and that grocery anchors typically generate repeat trips to the center. We expect that current macroeconomic conditions, coupled with continued population growth in the suburban markets where our retail properties are located, will create favorable conditions for grocery shopping and other uses provided by grocery-anchored shopping centers. With moderate supply growth following a period of historically low retail construction starts, we believe our centers, which are all generally located in Sun Belt and Mid-Atlantic markets, are well positioned to have solid operating fundamentals.

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                The debt market for our grocery-anchored shopping center assets remains strong. Life insurance companies have continued to demonstrate a specific interest in our strategy and we continue to see new participants in the market. In addition, due to some investor concern over retail in general, that allocation of capital into retail has been largely focused away from other retail product types and into the grocery-anchored sector. The result of this is that increased capital flows moving into the grocery-anchored sector has investors willing to accept lower yields to do so, thus putting upward pressure on prices for attractive acquisition opportunities inside our Sunbelt and Mid-Atlantic grocery-anchored strategy.

               Most of the growth in e-commerce around grocers is focused on “the last mile” or getting the goods in the stores to the homes of the customer. Some of our grocers have partnered with third parties (Publix and Kroger with Instacart) or formulated internal solutions (Walmart/in-store pickup and Kroger Pickup) to help advance this segment of their business and to increase customer convenience and promote brand loyalty. We believe that the traditional grocers must be proactive in pursuing on-line solutions in combination with their bricks and mortar physical stores and we have seen our primary grocery store anchors, Publix and Kroger, react quickly and aggressively to bolster their e-commerce and delivery options, an example being Kroger's acquisition of an interest in Ocado, a UK-based company that is the world's largest dedicated online grocery retailer that has developed a proprietary end-to-end operating solution for online grocery retail. We do believe that there will continue to be margin pressure on grocers and this will likely accelerate the difficulties of the weaker grocery chains. Furthermore, this could lead to increased mergers and acquisitions activity in the grocery sector which could also result in store closings or store downsizings due to store trade area overlap.

Preferred Office Properties

                The office investment market continues to post healthy fundamentals across our current and target footprint, where we are primarily focused on high growth, non-“Gateway” markets. Due to banking reforms and conservative behavior among market participants, this cycle has been characterized by an historically low level of speculative office construction which is supporting continued good performance. While rising interest rates may challenge competitors over the coming months, we are uniquely insulated in our current portfolio through long-term leases, few vacancies, long-term fixed rate debt and no sale pressure. In the event of continued interest rate hikes we would expect to see a softening cap rate environment as real estate re-prices, and seek to take advantage of that through property acquisitions.

Critical Accounting Policies

There have been no material changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018.

New Accounting Pronouncements

For a discussion of our adoption of new accounting pronouncements, please see Note 2 of our Consolidated Financial Statements.

Results of Operations

Certain financial highlights of our results of operations for the three-month and six-month periods ended June 30, 2019 were:

	Three months ended June 30,								Six months ended June 30,
	2019			2018			% change		2019			2018			% change
Revenues (in thousands)	$	113,852		$	96,389		18.1	%	$	225,358		$	186,759		20.7	%
Per share data:
Net income (loss) (1)	$	(0.66	)	$	(0.66	)	—		$	(1.32	)	$	(0.81	)	—
FFO (2)	$	0.36		$	0.38		(5.3	)%	$	0.75		$	0.75		—
AFFO (2)	$	0.22		$	0.37		(40.5	)%	$	0.55		$	0.63		(12.7	)%
Dividends (3)	$	0.2625		$	0.255		2.9	%	$	0.5225		$	0.505		3.5	%

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⁽¹⁾Per weighted average share of Common Stock outstanding for the periods indicated.

⁽²⁾FFO and AFFO results are presented per weighted average share of Common Stock and Class A Unit in our Operating Partnership outstanding for the periods indicated.

⁽³⁾ Per share of Common Stock and Class A Unit outstanding.

• For the second quarter 2019, our FFO payout ratio to Common Stockholders and Unitholders was approximately 73.9% and our FFO payout ratio (before the deduction of preferred dividends) to our preferred stockholders was approximately 63.3%. ^(A) 

• Our AFFO payout ratio to Common Stockholders and Unitholders was approximately 119.4% for the second quarter 2019 and 85.0% for the trailing twelve-month period ended June 30, 2019. Our AFFO payout ratio (before the deduction of preferred dividends) to our preferred stockholders was approximately 73.6% for the second quarter 2019 and 65.3% for the trailing twelve-month period ended June 30, 2019. ^(B) 

• At June 30, 2019, the market value of our common stock was $14.95 per share. A hypothetical investment in our Common Stock in our initial public offering on April 5, 2011, assuming the reinvestment of all dividends and no transaction costs, would have resulted in an average annual return of approximately 19.1% through June 30, 2019.

• As of June 30, 2019, the average age of our multifamily communities was approximately 5.4 years, which is the youngest in the public multifamily REIT industry.

• At the end of the second quarter 2019, we had $0 drawn on our $200 million revolving line of credit.

• Approximately 90.3% of our permanent property-level mortgage debt has fixed interest rates and approximately 5.7% has variable interest rates which are capped. In addition, we intend to refinance the remaining uncapped variable rate mortgage debt into new fixed rate instruments during the remainder of 2019. We believe we are well protected against potential increases in market interest rates.

• Over the next six quarters, the company has ten mortgage loans with balloon payments due at their maturity of approximately $130 million: eight retail assets and two student housing assets. Six of the eight retail assets have already acquired new debt and we have locked rate for a third quarter closing. For the remaining two retail assets, we plan to pay off the loans at their maturity and have them remain unencumbered. For the two student housing assets, we plan to refinance them shortly before their maturity.

• At June 30, 2019, our leverage, as measured by the ratio of our debt to the undepreciated book value of our total assets, was approximately 52.0%. Included in our total assets were our investments in the Series 2018-ML04 and Series 2019-ML05 from the Freddie Mac K program. Our leverage calculation excludes the gross assets and liabilities of approximately $572.0 million that are owned by other pool participants in the Freddie Mac K program that we consolidated under the VIE rules.

• As of June 30, 2019, our total assets were approximately $5.0 billion compared to approximately $3.9 billion as of June 30, 2018, an increase of approximately $1.1 billion, or approximately 27.4%. This growth was driven by (i) the acquisition of nine real estate properties (partially offset by the sale of three properties) and (ii) the consolidation of the mortgage pools from the Freddie Mac K program. Excluding the VIE mortgage pool assets from other participants in the K Program, our total assets grew approximately $762.2 million, or 20.9% since June 30, 2018.

• On April 12, 2019, we closed on a real estate loan investment of up to approximately $7.2 million in connection with the development of a 204-unit second phase of our Lodge at Hidden River multifamily community located in Tampa, Florida.

• On April 12, 2019, we refinanced the variable-rate mortgage on our Royal Lakes Marketplace grocery-anchored shopping center into a new 10 year, $9,700,000 loan with a fixed rate of 4.29%.

• On April 12, 2019, we refinanced the variable-rate mortgage on our Cherokee Plaza grocery-anchored shopping center into a new 8 year, $25,200,000 loan with a fixed rate of 4.28%.

• Effective June 30, 2019, we amended and sold the senior construction loan held by us on the 8West office development to a third party and collected a gross fee of $1.55 million from the buyer.

^(A) We calculate the FFO payout ratio to Common Stockholders as the ratio of Common Stock dividends and distributions to FFO Attributable to Common Stockholders and Unitholders. We calculate the FFO payout ratio to preferred stockholders as the ratio of Preferred Stock dividends to the sum of Preferred Stock

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dividends and FFO. Since our operations resulted in a net loss from continuing operations for the periods presented, a payout ratio based on net loss is not calculable. See Definitions of Non-GAAP Measures on page S-22.

^(B) We calculate the AFFO payout ratio to Common Stockholders as the ratio of Common Stock dividends and distributions to AFFO. We calculate the AFFO payout ratio to preferred stockholders as the ratio of Preferred Stock dividends to the sum of Preferred Stock dividends and AFFO.

Real Estate Loan Investments

Certain real estate loan investments include limited purchase options and additional amounts of accrued interest, which becomes due in cash to us on the earliest to occur of: (i) the maturity of the loan, (ii) any uncured event of default as defined in the associated loan agreement, (iii) the sale of the project or the refinancing of the loan (other than a refinancing loan by us or one of our affiliates) and (iv) any other repayment of the loan. There are no contingent events that are necessary to occur for us to realize the additional interest amounts. We hold options, but not obligations, to purchase certain of the properties which are partially financed by our real estate loans, as shown in the table below. The option purchase prices are negotiated at the time of the loan closing and are to be calculated based upon market cap rates at the time of exercise of the purchase option, with discounts ranging from between 10 and 60 basis points, depending on the loan.

As of June 30, 2019, our actual and potential purchase option portfolio consisted of:

		Total units upon	Purchase option window
Project/Property	Location	completion (1)	Begin	End
Multifamily communities:
Falls at Forsyth	Atlanta, GA	356	S + 90 days (2)	S + 150 days (2)
V & Three	Charlotte, NC	338	S + 90 days (2)	S + 150 days (2)
The Anson	Nashville, TN	301	S + 90 days (2)	S + 150 days (2)
Southpoint	Fredericksburg, VA	240	S + 90 days (2)	S + 150 days (2)
E-Town	Jacksonville, FL	332	S + 90 days (3)	S + 150 days (3)
Vintage	Destin, FL	282	(4)	(4)
Hidden River II	Tampa, FL	204	S + 90 days (2)	S + 150 days (2)
Student housing properties:
Solis Kennesaw II	Atlanta, GA	175	(5)	(5)
Office property:
8West	Atlanta, GA	(6)	(6)	(6)
		2,228
(1) We evaluate each project individually and we make no assurance that we will acquire any of the underlying properties from our real estate loan investment portfolio. The purchase options held by us on the 464 Bishop, Hidden River I, Haven Charlotte, Sanibel Straights, Wiregrass, Newbergh, Cameron Square, Solis Kennesaw, Encore and Tampa projects were terminated, in exchange for an aggregate $20.2 million in termination fees from the developers, net of amounts due to third party loan participants.
(2) The option period window begins and ends at the number of days indicated beyond the achievement of a 93% physical occupancy rate by the underlying property.
(3) The option period window begins on the earlier of June 21, 2024 and the number of days indicated beyond the achievement of a 93% physical occupancy rate by the underlying property.
(4) The option period window begins on the later of one year following receipt of final certificate of occupancy or 90 days beyond the achievement of a 93% physical occupancy rate by the underlying property and ends 60 days beyond the option period beginning date.
(5) The option period begins on October 1 of the second academic year following project completion and ends on the following December 31. The developer may elect to expedite the option period to begin December 1, 2020 and end on December 31, 2020.
(6) The project plans are for the construction of a class A office building consisting of approximately 192,000 rentable square feet; our purchase option window opens 90 days following the achievement of 90% lease commencement and ends on November 30, 2024 (subject to adjustment). Our purchase option is at the to-be-agreed-upon market value. In the event the property is sold to a third party, we would be due a fee based on a minimum multiple of 1.15 times the total commitment amount of the real estate loan investment, less the amounts actually paid by the borrower, up to and including payment of accrued interest and repayment of principal at the time of the sale.

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Three-month and six-month periods ended June 30, 2019 compared to 2018

The following discussion and tabular presentations highlight the major drivers behind the line item changes in our results of operations for the three-month and six-month periods ended June 30, 2019 versus 2018:

Preferred Apartment Communities, Inc.	Three months ended June 30,						Change inc (dec)
	2019			2018			Amount			Percentage
Revenues:
Rental revenues	$	95,592		$	76,552		$	19,040		24.9	%
Other property revenues	3,512			1,805			1,707			94.6	%
Interest income on loans and notes receivable	12,093			13,658			(1,565		)	(11.5	)%
Interest income from related parties	1,632			4,374			(2,742		)	(62.7	)%
Miscellaneous revenues	1,023			—			1,023			—
Total revenues	113,852			96,389			17,463			18.1	%
Operating expenses:
Property operating and maintenance	12,466			10,107			2,359			23.3	%
Property salary and benefits	4,828			4,228			600			14.2	%
Property management fees	3,373			2,776			597			21.5	%
Real estate taxes	12,544			10,063			2,481			24.7	%
General and administrative	1,913			1,957			(44		)	(2.2	)%
Equity compensation to directors and executives	306			950			(644		)	(67.8	)%
Depreciation and amortization	45,663			42,095			3,568			8.5	%
Asset management and general and administrative
expense fees to related parties	8,209			6,621			1,588			24.0	%
Insurance, professional fees and other expenses	2,690			2,008			682			34.0	%
Total operating expenses	91,992			80,805			11,187			13.8	%
Waived asset management and general and administrative
expense fees	(2,795		)	(1,429		)	(1,366		)	—
Net operating expenses	89,197			79,376			9,821			12.4	%
Operating income before gains on sales of
real estate and trading investments	24,655			17,013			7,642			44.9	%
Gain on sale of real estate and trading investment	—			2			(2		)	—
Operating income	24,655			17,015			7,640			44.9	%
Interest expense	27,611			22,347			5,264			23.6	%
Change in fair value of net assets of consolidated
VIE from mortgage-backed pool	584			54			530			981.5	%
Loss on debt extinguishment	(52		)	—			(52		)	—
Gain on sale of real estate loan investment	747			—			747			—
Net (loss) income	(1,677		)	(5,278		)	3,601			(68.2	)%
Consolidated net loss attributable to non-controlling interests	571			140			431			307.9	%
Net (loss) income attributable to the Company	$	(1,106	)	$	(5,138	)	$	4,032		(78.5	)%

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Preferred Apartment Communities, Inc.	Six months ended June 30,						Change inc (dec)
	2019			2018			Amount			Percentage
Revenues:
Rental revenues	$	187,830		$	150,814		$	37,016		24.5	%
Other property revenues	5,690			3,348			2,342			70.0	%
Interest income on loans and notes receivable	23,381			23,958			(577		)	(2.4	)%
Interest income from related parties	7,434			8,639			(1,205		)	(13.9	)%
Miscellaneous revenues	1,023			—			1,023			—
Total revenues	225,358			186,759			38,599			20.7	%
Operating expenses:
Property operating and maintenance	23,258			18,912			4,346			23.0	%
Property salary and benefits	9,485			8,127			1,358			16.7	%
Property management fees	6,640			5,532			1,108			20.0	%
Real estate taxes	25,044			20,038			5,006			25.0	%
General and administrative	4,527			3,798			729			19.2	%
Equity compensation to directors and executives	617			2,085			(1,468		)	(70.4	)%
Depreciation and amortization	90,952			82,711			8,241			10.0	%
Asset management and general and administrative
expense fees to related parties	16,038			12,862			3,176			24.7	%
Insurance, professional fees and other expenses	5,218			3,453			1,765			51.1	%
Total operating expenses	181,779			157,518			24,261			15.4	%
Waived asset management and general and administrative
expense fees	(5,424		)	(2,649		)	(2,775		)	104.8	%
Net operating expenses	176,355			154,869			21,486			13.9	%
Operating income before gains on sales of
real estate and trading investments	49,003			31,890			17,113			53.7	%
Gain on sale of real estate and trading investment	4			20,356			(20,352		)	—
Operating income	49,007			52,246			(3,239		)	(6.2	)%
Interest expense	54,367			43,315			11,052			25.5	%
Change in fair value of net assets of consolidated
VIE from mortgage-backed pool	725			54			671			1,242.6	%
Loss on debt extinguishment	(69		)	—			(69		)	—
Gain on sale of real estate loan investment	747			—			747			—
Net (loss) income	(3,957		)	8,985			(12,942		)	—
Consolidated net loss attributable to non-controlling interests	79			(240		)	319			—
Net (loss) income attributable to the Company	$	(3,878	)	$	8,745		$	(12,623	)	—

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New Market Properties, LLC

Our New Market Properties, LLC business consists of our portfolio of grocery-anchored shopping centers and our Dawson Marketplace real estate loan supporting a shopping center in the Atlanta, Georgia market. Comparative statements of operations of New Market Properties, LLC for the three-month and six-month periodsended June 30, 2019 versus 2018 are presented below. These statements of operations include no allocations of corporate overhead or other expenses.

New Market Properties, LLC	Three months ended June 30,						Change inc (dec)
	2019			2018			Amount			Percentage
Revenues:
Rental revenues	$	22,346		$	17,567		$	4,779		27.2	%
Other property revenues	98			144			(46		)	(31.9	)%
Interest income on loans and notes receivable	438			501			(63		)	(12.6	)%
Total revenues	22,882			18,212			4,670			25.6	%
Operating expenses:
Property operating and maintenance	2,270			2,184			86			3.9	%
Property management fees	754			632			122			19.3	%
Real estate taxes	3,043			2,173			870			40.0	%
General and administrative	306			163			143			87.7	%
Equity compensation to directors and executives	18			148			(130		)	(87.8	)%
Depreciation and amortization	10,632			9,177			1,455			15.9	%
Asset management and general and administrative
expense fees to related parties	1,725			1,363			362			26.6	%
Insurance, professional fees and other expenses	310			285			25			8.8	%
Total operating expenses	19,058			16,125			2,933			18.2	%
Waived asset management and general and administrative
expense fees	(103		)	(56		)	(47		)	83.9	%
Net operating expenses	18,955			16,069			2,886			18.0	%
Operating income	3,927			2,143			1,784			83.2	%
Interest expense	6,115			4,629			1,486			32.1	%
Loss on extinguishment of debt	52			—			52			—	%
Net loss	$	(2,240	)	$	(2,486	)	$	246		(9.9	)%

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New Market Properties, LLC	Six months ended June 30,						Change inc (dec)
	2019			2018			Amount			Percentage
Revenues:
Rental revenues	$	43,875		$	34,906		$	8,969		25.7	%
Other property revenues	193			224			(31		)	(13.8	)%
Interest income on loans and notes receivable	873			997			(124		)	(12.4	)%
Total revenues	44,941			36,127			8,814			24.4	%
Operating expenses:
Property operating and maintenance	4,328			3,831			497			13.0	%
Property management fees	1,521			1,360			161			11.8	%
Real estate taxes	5,840			4,741			1,099			23.2	%
General and administrative	664			310			354			114.2	%
Equity compensation to directors and executives	36			296			(260		)	(87.8	)%
Depreciation and amortization	20,967			18,057			2,910			16.1	%
Asset management and general and administrative
expense fees to related parties	3,382			2,679			703			26.2	%
Insurance, professional fees and other expenses	693			516			177			34.3	%
Total operating expenses	37,431			31,790			5,641			17.7	%
Waived asset management and general and administrative
expense fees	(202		)	(123		)	(79		)	64.2	%
Net operating expenses	37,229			31,667			5,562			17.6	%
Operating income	7,712			4,460			3,252			72.9	%
Interest expense	11,701			8,985			2,716			30.2	%
Loss on extinguishment of debt	52			—			52			—	%
Net loss	$	(4,041	)	$	(4,525	)	$	484		(10.7	)%

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Recent acquisitions

Our acquisitions (net of dispositions) of real estate assets since January 1, 2018 were the primary drivers behind our increases in rental and property revenues and property operating expenses for the three-month and six-month periodsended June 30, 2019 versus 2018.

Real estate assets acquired

Acquisition date	Property	Location	Units	Beds	Leasable square feet
	Multifamily communities:
1/9/2018	The Lux at Sorrel	Jacksonville, FL	265	n/a	n/a
2/28/2018	Green Park	Atlanta, GA	310	n/a	n/a
9/27/2018	The Lodge at Hidden River	Tampa, FL	300	n/a	n/a
11/9/2018	Vestavia Reserve	Birmingham, AL	272	n/a	n/a
11/15/2018	CityPark View South (1)	Charlotte, NC	200	n/a	n/a
	New Market Properties:
4/27/2018	Greensboro Village	Nashville, TN	n/a	n/a	70,203
4/27/2018	Governors Towne Square	Atlanta, GA	n/a	n/a	68,658
6/26/2018	Neapolitan Way	Naples, FL	n/a	n/a	137,580
6/29/2018	Conway Plaza	Orlando, FL	n/a	n/a	117,705
7/6/2018	Brawley Commons	Charlotte, NC	n/a	n/a	122,028
12/21/2018	Hollymead Town Center	Charlottesville, VA	n/a	n/a	158,807
1/17/2019	Gayton Crossing	Richmond, VA	n/a	n/a	158,316
5/28/2019	Free State Shopping Center	Washington, D.C.	n/a	n/a	264,152
6/12/2019	Disston Plaza	Tampa - St. Petersburg, FL	n/a	n/a	129,150
6/12/2019	Polo Grounds Mall	West Palm Beach, FL	n/a	n/a	130,015
	Student housing properties:
5/10/2018	The Tradition	College Station, TX	427	808	n/a
5/31/2018	The Retreat at Orlando	Orlando, FL	221	894	n/a
6/27/2018	The Bloc	Lubbock, TX	140	556	n/a
3/27/2019	Haven49	Charlotte, NC	322	887	n/a
	Preferred Office Properties:
1/29/2018	Armour Yards	Atlanta, GA	n/a	n/a	187,000
7/31/2018	150 Fayetteville	Raleigh, NC	n/a	n/a	560,000
12/20/2018	Capitol Towers	Charlotte, NC	n/a	n/a	479,000
			2,457	3,145	2,582,614

⁽¹⁾CityPark View South is a second phase of an existing property, and shares a leasing office with the original phase. Therefore, it is not counted as a separate property.

Real estate assets sold

Disposition date	Property	Location	Units
3/20/2018	Lake Cameron	Raleigh, NC	328
9/28/2018	Stone Rise	Philadelphia, PA	216
10/23/2018	Stoneridge Farms at the Hunt Club	Nashville, TN	364
12/11/2018	McNeil Ranch	Austin, TX	192

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Rental Revenues

Rental revenue increased due primarily to properties acquired since January 1, 2018, as shown in the following table:

	Three-month Period Ended June 30,					Six-month Period Ended June 30,
	2019 versus 2018					2019 versus 2018
	Increase					Increase
Rental revenues	Amount (rounded to 000s):			Percent of increase		Amount (rounded to 000s):			Percent of increase
Properties acquired since January 1, 2018	$	20,545		107.9	%	$	41,712		112.7	%
Properties sold since January 1, 2018	(3,038		)	(16.0	)%	(6,840		)	(18.5	)%
Properties acquired in 2011 - 2017	1,533			8.1	%	2,144			5.8	%
Total	$	19,040		100.0	%	$	37,016		100.0	%

Increases in occupancy rates and in percentages of leased space and rent growth are the primary drivers of increases in rental revenue from our owned properties. Factors which we believe affect market rents include vacant unit inventory in local markets, local and national economic growth and resultant employment stability, income levels and growth, the ease of obtaining credit for home purchases, and changes in demand due to consumer confidence in the above factors.

We also collect revenue from residents and tenants for items such as utilities, application fees, lease termination fees, common area maintenance reimbursements and late charges. The increases in these other property revenues for the three-month and six-month periods ended June 30, 2019 versus 2018 were primarily due to the acquisitions listed above, and approximately $1.3 million in lease termination revenues recorded in the second quarter of 2019.

Interest income from our real estate loan investments decreased for the three-month and six-month periods ended June 30, 2019 versus 2018. The principal amount outstanding on our portfolio of real estate loan investments decreased to approximately $362.0 million at June 30, 2019 from $376.1 million at June 30, 2018. The total commitment amount of our real estate loan investment portfolio decreased from approximately $512.8 million at June 30, 2018 to $443.1 million at June 30, 2019. Real estate loan investments supporting five multifamily communities and two student housing properties were repaid or settled between June 30, 2018 and June 30, 2019.

We recorded interest income and other revenue from these instruments as presented in Note 4 to the Company's Consolidated Financial Statements.

Property operating and maintenance expense

Expenses to operate and maintain our properties increased due primarily to properties acquired since January 1, 2018, as shown in the following table. The primary components of operating and maintenance expense are utilities, property repairs, and landscaping costs. The expenses incurred for property repairs and, to a lesser extent, utilities could generally be expected to increase gradually over time as the buildings and properties age. Utility costs may generally be expected to increase in future periods as rate increases from providing carriers are passed on to our residents and tenants.

	Three-month Period Ended June 30,					Six-month Period Ended June 30,
	2019 versus 2018					2019 versus 2018
	Increase					Increase
Property operating and maintenance expense	Amount (rounded to 000s):			Percent of increase		Amount (rounded to 000s):			Percent of increase
Properties acquired since January 1, 2018	$	3,112		131.9	%	$	5,865		135.0	%
Properties sold since January 1, 2018	(583		)	(24.7	)%	(1,221		)	(28.1	)%
Properties acquired in 2011 - 2017	(170		)	(7.2	)%	(298		)	(6.9	)%
Total	$	2,359		100.0	%	$	4,346		100.0	%

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Property salary and benefits

We recorded property salary and benefits expense for individuals who handle the on-site management, operations and maintenance of our properties. These costs increased primarily due to the incremental costs brought on by additional personnel necessary to manage and operate properties acquired since January 1, 2018, as shown in the following table:

	Three-month Period Ended June 30,					Six-month Period Ended June 30,
	2019 versus 2018					2019 versus 2018
	Increase					Increase
Property salary and benefits	Amount (rounded to 000s):			Percent of increase		Amount (rounded to 000s):			Percent of increase
Properties acquired since January 1, 2018	$	933		155.5	%	$	1,867		137.5	%
Properties sold since January 1, 2018	(274		)	(45.7	)%	(650		)	(47.9	)%
Properties acquired in 2011 - 2017	(59		)	(9.8	)%	141			10.4	%
Total	$	600		100.0	%	$	1,358		100.0	%

Property management fees

We pay a fee for property management services to our Manager in an amount of 4% of gross property revenues as compensation for services such as rental, leasing, operation and management of our multifamily communities and the supervision of any subcontractors; for grocery-anchored shopping center assets, property management fees are generally 4% of gross property revenues, of which generally 2.0% to 2.5% is paid to a third party management company. Property management fees for office building assets are within the range of 2.0% to 2.75% of gross property revenues, of which 1.5% to 2.25% is paid to a third party management company. The increases were primarily due to properties acquired since January 1, 2018, as shown in the following table:

	Three-month Period Ended June 30,					Six-month Period Ended June 30,
	2019 versus 2018					2019 versus 2018
	Increase					Increase
Property management fees	Amount (rounded to 000s):			Percent of increase		Amount (rounded to 000s):			Percent of increase
Properties acquired since January 1, 2018	$	659		110.4	%	$	1,357		122.5	%
Properties sold since January 1, 2018	(124		)	(20.8	)%	(287		)	(25.9	)%
Properties acquired in 2011 - 2017	62			10.4	%	38			3.4	%
Total	$	597		100.0	%	$	1,108		100.0	%

Real estate taxes

We are liable for property taxes due to the various counties and municipalities that levy such taxes on real property for each of our properties. Real estate taxes rose primarily due to the incremental costs brought on by properties acquired since January 1, 2018, as shown in the following table:

	Three-month Period Ended June 30,					Six-month Period Ended June 30,
	2019 versus 2018					2019 versus 2018
	Increase					Increase
Real estate taxes	Amount (rounded to 000s):			Percent of increase		Amount (rounded to 000s):			Percent of increase
Properties acquired since January 1, 2018	$	2,241		90.3	%	$	4,925		98.4	%
Properties sold since January 1, 2018	(409		)	(16.5	)%	(800		)	(16.0	)%
Properties acquired in 2011 - 2017	649			26.2	%	881			17.6	%
Total	$	2,481		100.0	%	$	5,006		100.0	%

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We generally expect the assessed values of our properties to rise over time, owing to our expectation of improving market conditions, as well as pressure on municipalities to raise revenues.  

General and Administrative

The changes in general and administrative expenses occurred as shown in the following table:

	Three-month Period Ended June 30,					Six-month Period Ended June 30,
	2019 versus 2018					2019 versus 2018
	Increase					Increase
General and administrative expense	Amount (rounded to 000s):			Percent of increase		Amount (rounded to 000s):			Percent of increase
Taxes, licenses and fees	$	184		(418.1	)%	$	425		58.2	%
Properties acquired since January 1, 2018	232			(527.3	)%	709			97.3	%
Properties sold since January 1, 2018	(72		)	163.6	%	(159		)	(21.8	)%
Properties acquired in 2011 - 2017	(388		)	881.8	%	(246		)	(33.7	)%
Total	$	(44	)	100.0	%	$	729		100.0	%

Equity compensation to directors and executives

Expenses recorded for equity compensation awards decreased for the three-month and six-month periods ended June 30, 2019 versus 2018 primarily due to the lack of a Class B OP Unit grant for 2019. The Class B Unit grant made on January 2, 2018 was comprised of an aggregate 256,087 Class B Units with a fair value of approximately $4.3 million.

Depreciation and amortization

The increases in depreciation and amortization for the three-month and six-month periods ended June 30, 2019 versus 2018 are primarily due to acquisitions made during 2019.

Asset management fees and general and administrative fees to related party

Monthly asset management fees are equal to one-twelfth of 0.50% of the total book value of assets, as adjusted. General and administrative expense fees are equal to 2% of the monthly gross revenues of the Company. Both are calculated as prescribed by the Management Agreement and are paid monthly to our Manager. These fees rose primarily due to the incremental assets and revenues brought on by acquired office buildings, grocery-anchored shopping centers, student housing properties and multifamily communities listed previously.

Insurance, professional fees and other expenses

The increases consisted of:

	Three-month Period Ended June 30,					Six-month Period Ended June 30,
	2019 versus 2018					2019 versus 2018
	Increase					Increase
Insurance, professional fees and other expenses	Amount (rounded to 000s):			Percent of increase		Amount (rounded to 000s):		Percent of increase
Audit and tax fees	$	(108	)	(15.9	)%	$	3	0.2	%
Insurance premiums and claims	394			57.8	%	1,087		61.6	%
Legal fees	202			29.6	%	235		13.3	%
Internalization costs	280			41.1	%	325		18.4	%
Other professional fees	(86		)	(12.6	)%	115		6.5	%
Total	$	682		100.0	%	$	1,765	100.0	%

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Waived asset management and general and administrative expense fees

The Manager may, in its discretion, waive some or all of the asset management, property management, or general and administrative fees for properties owned by the Company. The waived fees are converted at the time of such election into contingent fees, which are earned by the Manager only in the event of a sales transaction, and whereby the Company’s capital contributions for the property being sold exceed a 7% annual rate of return. The Company will recognize in future periods to the extent, if any, it determines that the sales transaction is probable, and that the estimated net sale proceeds would exceed the annual rate of return hurdle.

There were no contingent fees realized due to property sales for the three-month or six-month periods ended June 30, 2019 or 2018.

Interest expense

The increases consisted of:

	Three-month Period Ended June 30,					Six-month Period Ended June 30,
	2019 versus 2018					2019 versus 2018
	Increase					Increase
Interest expense	Amount (rounded to 000s):			Percent of increase		Amount (rounded to 000s):			Percent of increase
Properties acquired since January 1, 2018	$	6,880		130.8	%	$	13,833		125.1	%
Properties sold since January 1, 2018	(542		)	(10.3	)%	(1,228		)	(11.1	)%
Properties acquired in 2011 - 2017	23			0.4	%	(30		)	(0.3	)%
KeyBank operating LOC and Term Notes	(540		)	(10.3	)%	(689		)	(6.2	)%
Loan participants	(557		)	(10.6	)%	(834		)	(7.5	)%
Total	$	5,264		100.0	%	$	11,052		100.0	%

See the sections entitled Contractual Obligations and Quantitative and Qualitative Disclosures About Market Risk.

Definitions of Non-GAAP Measures

We disclose FFO and AFFO, each of which meet the definition of a “non-GAAP financial measure”, as set forth in Item 10(e) of Regulation S-K promulgated by the SEC. As a result we are required to include in this filing a statement of why the Company believes that presentation of these measures provides useful information to investors. None of FFO and AFFO should be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further FFO and AFFO should be compared with our reported net income or net loss and considered in addition to cash flows in accordance with GAAP, as presented in our consolidated financial statements. FFO and AFFO are not considered measures of liquidity and are not alternatives to measures calculated under GAAP.

Funds From Operations Attributable to Common Stockholders and Unitholders (“FFO”)

FFO is one of the most commonly utilized Non-GAAP measures currently in practice. In its 2002 “White Paper on Funds From Operations,” which was restated in 2018,the National Association of Real Estate Investment Trusts, or NAREIT, standardized the definition of how Net income/loss should be adjusted to arrive at FFO, in the interests of uniformity and comparability. We have adopted the NAREIT definition for computing FFO as a meaningful supplemental gauge of our operating results, and as is most often presented by other REIT industry participants.

The NAREIT definition of FFO (and the one reported by the Company) is:

Net income/loss, excluding:

• depreciation and amortization related to real estate;

• gains and losses from the sale of certain real estate assets;

• gains and losses from change in control and

• impairment writedowns of certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.

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Not all companies necessarily utilize the standardized NAREIT definition of FFO, so caution should be taken in comparing the Company’s reported FFO results to those of other companies. The Company’s FFO results are comparable to the FFO results of other companies that follow the NAREIT definition of FFO and report these figures on that basis. FFO is a non-GAAP measure that is reconciled to its most comparable GAAP measure, net income/loss available to common stockholders.

Adjusted Funds From Operations Attributable to Common Stockholders and Unitholders (“AFFO”)

AFFO makes further adjustments to FFO results in order to arrive at a more refined measure of operating and financial performance. There is no industry standard definition of AFFO and practice is divergent across the industry. The Company calculates AFFO as:

FFO, plus:

• non-cash equity compensation to directors and executives;

• amortization of loan closing costs;

• losses on debt extinguishments or refinancing costs;

• weather-related property operating losses;

• amortization of loan coordination fees paid to the Manager;

• depreciation and amortization of non-real estate assets;

• net loan fees received;

• accrued interest income received;

• internalization costs;

• allowances for loan loss reserves;

• cash received for purchase option terminations;

• deemed dividends on preferred stock redemptions;

• non-cash dividends on Series M Preferred Stock; and

• amortization of lease inducements;

Less:

• non-cash loan interest income;

• cash paid for loan closing costs;

• amortization of acquired real estate intangible liabilities;

• amortization of straight line rent adjustments and deferred revenues; and

• normally-recurring capital expenditures and capitalized retail direct leasing costs.

AFFO figures reported by us may not be comparable to those AFFO figures reported by other companies. We utilize AFFO as another measure of the operating performance of our portfolio of real estate assets. We believe AFFO is useful to investors as a supplemental gauge of our operating performance and may be useful in comparing our operating performance with other real estate companies. Since our calculation of AFFO removes other significant non-cash charges and revenues and other costs which are not representative of our ongoing business operations, we believe it improves comparability to investors in assessing our core operating results across periods. AFFO is a non-GAAP measure that is reconciled to its most comparable GAAP measure, net income/loss available to common stockholders. FFO and AFFO are not considered measures of liquidity and are not alternatives to measures calculated under GAAP.

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Reconciliation of FFO Attributable to Common Stockholders and Unitholders and AFFO
to Net (Loss) Income Attributable to Common Stockholders (A)
		Three months ended June 30,
(In thousands, except per-share figures)		2019			2018
Net loss attributable to common stockholders (See note 1)		$	(28,655	)	$	(26,068	)
Add:	Depreciation of real estate assets	36,310			29,441
	Amortization of acquired real estate intangible assets and deferred leasing costs	8,893			12,314
	Net loss attributable to non-controlling interests (See note 2)	(571		)	(140		)
Less:	(Gain) loss on sales of trading investment and real estate	—			(2		)
FFO attributable to common stockholders and unitholders		15,977			15,545
Add:	Loan cost amortization on acquisition term note	20			19
	Amortization of loan coordination fees paid to the Manager (See note 3)	473			631
	Payment of costs related to property refinancing	369			20
	Weather-related property operating losses	—			66
	Non-cash equity compensation to directors and executives	306			950
	Amortization of loan closing costs (See note 4)	1,159			1,213
	Depreciation/amortization of non-real estate assets	460			340
	Net loan fees received (See note 5)	125			411
	Accrued interest income received (See note 6)	2,318			2,769
	Internalization costs (See note 7)	280			—
	Deemed dividends from cash redemptions of preferred stock	4			201
	Amortization of lease inducements (See note 8)	432			311
	Non-cash dividends on Preferred Stock	119			47
	Purchase option termination fees received and related revenue adjustments (See note 9)	(1,383		)	2,514
Less:	Non-cash loan interest income (See note 6)	(3,658		)	(5,690		)
	Non-cash revenues from mortgage-backed securities	(274		)	(53		)
	Cash paid for loan closing costs	(5		)	—
	Amortization of acquired above and below market lease intangibles
	and straight-line rental revenues (See note 10)	(4,324		)	(2,505		)
	Amortization of deferred revenues (See note 11)	(941		)	(589		)
	Normally recurring capital expenditures and leasing costs (See note 12)	(1,563		)	(1,080		)
AFFO		$	9,894		$	15,120
Common Stock dividends and distributions to Unitholders declared:
	Common Stock dividends	$	11,581		$	10,104
	Distributions to Unitholders (See note 2)	230			273
	Total	$	11,811		$	10,377
Common Stock dividends and Unitholder distributions per share		$	0.2625		$	0.255
FFO per weighted average basic share of Common Stock and Unit outstanding		$	0.36		$	0.38
AFFO per weighted average basic share of Common Stock and Unit outstanding		$	0.22		$	0.37
Weighted average shares of Common Stock and Units outstanding: (A)
	Basic:	43,703			39,383
	Common Stock	877			1,070
	Class A Units	44,580			40,453
	Common Stock and Class A Units
	Diluted Common Stock and Class A Units (B)	45,027			41,009
Actual shares of Common Stock outstanding, including 26 and 25 unvested shares
of restricted Common Stock at June 30, 2019 and 2018, respectively.		44,273			39,750
Actual Class A Units outstanding at June 30, 2019 and 2018, respectively.		875			1,070
	Total	45,148			40,820
(A) Units and Unitholders refer to Class A Units in our Operating Partnership (as defined in note 2), or Class A Units, and holders of Class A Units, respectively. Unitholders include recipients of awards of Class B Units in our Operating Partnership, or Class B Units, for annual service which became vested and earned and automatically converted to Class A Units. Unitholders also include the entity that contributed the Wade Green grocery-anchored shopping center. The Class A Units collectively represent an approximate 1.97% weighted average non-controlling interest in the Operating Partnership for the three-month period ended June 30, 2019.
(B) Since our FFO and AFFO results are positive for the periods reflected above, we are presenting recalculated diluted weighted average shares of Common Stock and Class A Units for these periods for purposes of this table, which includes the dilutive effect of common stock equivalents from grants of the Class B Units, warrants included in units of Series A Preferred Stock issued, as well as annual grants of restricted Common Stock. The weighted average shares of Common Stock outstanding presented on the Consolidated Statements of Operations are the same for basic and diluted for any period for which we recorded a net loss available to common stockholders.

See Notes to Reconciliation of FFO, Core FFO and AFFO to Net Income (Loss) Attributable to Common stockholders.

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Reconciliation of FFO Attributable to Common Stockholders and Unitholders and AFFO
to Net (Loss) Income Attributable to Common Stockholders (A)
		Six months ended June 30,
(In thousands, except per-share figures)		2019			2018
Net loss attributable to common stockholders (See note 1)		$	(56,968	)	$	(31,704	)
Add:	Depreciation of real estate assets	72,027			57,153
	Amortization of acquired real estate intangible assets and deferred leasing costs	18,016			24,905
	Net loss attributable to non-controlling interests (See note 2)	(79		)	240
Less:	(Gain) loss on sales of trading investment and real estate	—			(20,356		)
FFO attributable to common stockholders and unitholders		32,996			30,238
Add:	Loan cost amortization on acquisition term note	39			44
	Amortization of loan coordination fees paid to the Manager (See note 3)	941			1,107
	Payment of costs related to property refinancing	424			61
	Weather-related property operating losses	—			(194		)
	Non-cash equity compensation to directors and executives	617			2,085
	Amortization of loan closing costs (See note 4)	2,290			2,258
	Depreciation/amortization of non-real estate assets	909			653
	Net loan fees received (See note 5)	526			1,211
	Accrued interest income received (See note 6)	5,078			4,112
	Internalization costs (See note 7)	325			—
	Deemed dividends from cash redemptions of preferred stock	7			519
	Amortization of lease inducements (See note 8)	860			568
	Non-cash dividends on Preferred Stock	212			153
	Purchase option termination fees received and related revenue adjustments (See note 9)	(1,087		)	2,514
Less:	Non-cash loan interest income (See note 6)	(6,982		)	(10,622		)
	Non-cash revenues from mortgage-backed securities	(415		)	(54		)
	Cash paid for loan closing costs	(8		)	(391		)
	Amortization of acquired above and below market lease intangibles
	and straight-line rental revenues (See note 10)	(8,082		)	(5,694		)
	Amortization of deferred revenues (See note 11)	(1,881		)	(1,085		)
	Normally recurring capital expenditures and leasing costs (See note 12)	(2,743		)	(1,954		)
AFFO		$	24,026		$	25,529
Common Stock dividends and distributions to Unitholders declared:
	Common Stock dividends	$	22,776		$	19,906
	Distributions to Unitholders (See note 2)	458			540
	Total	$	23,234		$	20,446
Common Stock dividends and Unitholder distributions per share		$	0.5225		$	0.505
FFO per weighted average basic share of Common Stock and Unit outstanding		$	0.75		$	0.75
AFFO per weighted average basic share of Common Stock and Unit outstanding		$	0.55		$	0.63
Weighted average shares of Common Stock and Units outstanding: (A)
	Basic:	43,194			39,241
	Common Stock	879			1,070
	Class A Units	44,073			40,311
	Common Stock and Class A Units
	Diluted Common Stock and Class A Units (B)	44,755			41,273
Actual shares of Common Stock outstanding, including 26 and 25 unvested shares
of restricted Common Stock at June 30, 2019 and 2018, respectively.		44,273			39,750
Actual Class A Units outstanding at June 30, 2019 and 2018, respectively.		875			1,070
	Total	45,148			40,820
(A) Units and Unitholders refer to Class A Units in our Operating Partnership (as defined in note 2), or Class A Units, and holders of Class A Units, respectively. Unitholders include recipients of awards of Class B Units in our Operating Partnership, or Class B Units, for annual service which became vested and earned and automatically converted to Class A Units. Unitholders also include the entity that contributed the Wade Green grocery-anchored shopping center. The Class A Units collectively represent an approximate 1.99% weighted average non-controlling interest in the Operating Partnership for the six-month period ended June 30, 2019.
(B) Since our FFO and AFFO results are positive for the periods reflected above, we are presenting recalculated diluted weighted average shares of Common Stock and Class A Units for these periods for purposes of this table, which includes the dilutive effect of common stock equivalents from grants of the Class B Units, warrants included in units of Series A Preferred Stock issued, as well as annual grants of restricted Common Stock. The weighted average shares of Common Stock outstanding presented on the Consolidated Statements of Operations are the same for basic and diluted for any period for which we recorded a net loss available to common stockholders.

See Notes to Reconciliation of FFO, Core FFO and AFFO to Net Income (Loss) Attributable to Common stockholders.

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Notes to Reconciliations of FFO Attributable to Common Stockholders and Unitholders and AFFO to Net Income (Loss) Attributable to Common Stockholders

1) Rental and other property revenues and property operating expenses for the quarter ended June 30, 2019 include activity for the properties acquired during the quarter only from their respective dates of acquisition. In addition, the second quarter 2019 period includes activity for the properties acquired since June 30, 2018. Rental and other property revenues and expenses for the second quarter 2018 include activity for the acquisitions made during that period only from their respective dates of acquisition.

2) Non-controlling interests in Preferred Apartment Communities Operating Partnership, L.P., or our Operating Partnership, consisted of a total of 874,937 Class A Units as of June 30, 2019. Included in this total are 419,228 Class A Units which were granted as partial consideration to the seller in conjunction with theseller's contribution to us on February 29, 2016 of the Wade Green grocery-anchored shopping center. The remaining Class A units were awarded primarily to our key executive officers. The Class A Units are apportioned a percentage of our financial results as non-controlling interests. The weighted average ownership percentage of these holders of Class A Units was calculated to be 1.97% and 2.64% for the three-month periods ended June 30, 2019 and 2018, respectively.

3) We pay loan coordination fees to Preferred Apartment Advisors, LLC, our Manager, to reflect the administrative effort involved in arranging debt financing for acquired properties. The fees are calculated as 0.6% of the amount of any mortgage indebtedness on newly-acquired properties or refinancing and are amortized over the lives of the respective mortgage loans. This non-cash amortization expense is an addition to FFO in the calculation of AFFO. At June 30, 2019, aggregate unamortized loan coordination fees were approximately $13.5 million, which will be amortized over a weighted average remaining loan life of approximately 10.6 years.

4) We incur loan closing costs on our existing mortgage loans, which are secured on a property-by-property basis by each of our acquired real estate assets, and also for occasional amendments to our syndicated revolving line of credit with Key Bank National Association, or our Revolving Line of Credit. Effective April 13, 2018, the maximum borrowing capacity on the Revolving Line of Credit was increased from $150 million to $200 million. These loan closing costs are also amortized over the lives of the respective loans and the Revolving Line of Credit, and this non-cash amortization expense is an addition to FFO in the calculation of AFFO. Neither we nor the Operating Partnership have any recourse liability in connection with any of the mortgage loans, nor do we have any cross-collateralization arrangements with respect to the assets securing the mortgage loans, other than security interests in 49% of the equity interests of the subsidiaries owning such assets, granted in connection with our Revolving Line of Credit, which provides for full recourse liability. At June 30, 2019, aggregate unamortized loan costs were approximately $23.7 million, which will be amortized over a weighted average remaining loan life of approximately 9.2 years.

5) We receive loan origination fees in conjunction with the origination of certain real estate loan investments. These fees are then recognized as revenue over the lives of the applicable loans as adjustments of yield using the effective interest method. The total fees received after the payment of loan origination fees to our Manager are additive adjustments in the calculation of AFFO. Correspondingly, the amortized non-cash income is a deduction in the calculation of AFFO. Over the lives of certain loans, we accrue additional interest amounts that become due to us at the time of repayment of the loan or refinancing of the property, or when the property is sold. This non-cash interest income is subtracted from FFO in our calculation of AFFO. The amount of additional accrued interest becomes an additive adjustment to FFO once received from the borrower (see note 6).

6) This adjustment reflects the receipt during the periods presented of additional interest income (described in note 5 above) which was earned and accrued prior to those periods presented on various real estate loans.

7) This adjustment reflects the add-back of exploratory expenses incurred by the Company related to the potential internalization of the functions performed by its Manager.

8) This adjustment removes the non-cash amortization of costs incurred to induce tenants to lease space in our office buildings and grocery-anchored shopping centers.

9) Effective January 1, 2019, we terminated our purchase options on the Sanibel Straits, Newbergh, Wiregrass and Cameron Square multifamily communities and the Solis Kennesaw student housing property; on May 7, 2018, we terminated our purchase options on the Encore, Bishop Street and Hidden River multifamily communities and the Haven46 and Haven Charlotte student housing properties, all of which are (or were) partially supported by real estate loan investments held by us. In exchange, we arranged to receive termination fees aggregating approximately $20.2 million from the developers, which are recorded as revenue over the period beginning on the date of election until the earlier of (i) the maturity of the real estate loan investment and (ii) the sale of the property. The receipt of the cash termination fees are an additive adjustment in our calculation of AFFO and the removal of non-cash revenue from the recognition of the termination fees are a reduction to FFO in our calculation of AFFO; both of these adjustments are presented in a single net number within this line. For the three-month and six month periods ended June 30, 2019, we had recognized termination fee revenues in excess of cash received, resulting in the negative adjustments shown; for the three-month and six month periods ended June 30, 2018, we had received cash in excess of recognized termination fee revenues, resulting in the additive adjustments to FFO in our calculation of AFFO.

10) This adjustment reflects straight-line rent adjustments and the reversal of the non-cash amortization of below-market and above-market lease intangibles, which were recognized in conjunction with our acquisitions and which are amortized over the estimated average remaining lease terms from the acquisition date for multifamily communities and over the remaining lease terms for grocery-anchored

66

shopping center assets and office buildings. At June 30, 2019, the balance of unamortized below-market lease intangibles was approximately $51.8 million, which will be recognized over a weighted average remaining lease period of approximately 9.4 years.

11) This adjustment removes the non-cash amortization of deferred revenue recorded by us in conjunction with Company-owned lessee-funded tenant improvements in our office buildings.

12) We deduct from FFO normally recurring capital expenditures that are necessary to maintain our assets’ revenue streams in the calculation of AFFO. This adjustment also deducts from FFO capitalized amounts for third party costs during the period to originate or renew leases in our grocery-anchored shopping centers and office buildings. No adjustment is made in the calculation of AFFO for nonrecurring capital expenditures. See Capital Expenditures, Grocery-Anchored Shopping Center Portfolio, and Office Buildings Portfolio sections for definitions of these terms.

Liquidity and Capital Resources

Short-Term Liquidity

We believe our principal short-term liquidity needs are to fund:

• operating expenses directly related to our portfolio of multifamily communities, student housing properties, grocery-anchored shopping centers and office properties (including regular maintenance items);

• capital expenditures incurred to lease our multifamily communities, student housing properties, grocery-anchored shopping centers and office properties;

• interest expense on our outstanding property level debt;

• amounts due on our Credit Facility;

• distributions that we pay to our preferred stockholders, common stockholders, and unitholders;

• cash redemptions that we may pay to our preferred stockholders, and

• committed investments.

We have a credit facility, or Credit Facility, with KeyBank National Association, or KeyBank, which defines a revolving line of credit, or Revolving Line of Credit, which is used to fund investments, capital expenditures, dividends (with consent of KeyBank), working capital and other general corporate purposes on an as needed basis. On March 23, 2018, the maximum borrowing capacity on the Revolving Line of Credit was increased to $200 million pursuant to an accordion feature. The accordion feature permits the maximum borrowing capacity to be expanded or contracted without amending any further terms of the instrument. On December 12, 2018, the Fourth Amended and Restated Credit Agreement, or the Amended and Restated Credit Agreement, was amended to extend the maturity to December 12, 2021, with an option to extend the maturity date to December 12, 2022, subject to certain conditions described therein. The Revolving Line of Credit accrues interest at a variable rate of one month LIBOR plus an applicable margin of 2.75% to 3.50% per annum, depending upon our leverage ratio. The weighted average interest rate for the Revolving Line of Credit was 5.60% for the six-month period ended June 30, 2019. The Amended and Restated Credit Agreement also reduced the commitment fee on the average daily unused portion of the Revolving Line of Credit to 0.25% or 0.30% per annum, depending upon our outstanding Credit Facility balance.

On March 29, 2018, we refinanced the mortgage on our Sol student housing property. A short-term bridge loan was used to replace the mortgage being held on the Acquisition Facility. The mortgage principal balance of approximately $37.5 million remained the same under the new financing arrangement, and the existing variable interest rate increased 10 basis points, to 210 basis points over LIBOR. As a result of the refinance, we incurred expenses of approximately $61,000, which are included within the Interest Expense line of the Consolidated Statements of Operations.

On May 26, 2016, we utilized proceeds from the Interim Term Loan to partially finance the acquisition of Anderson Central, a grocery-anchored shopping center located in Anderson, South Carolina. The Interim Term Loan accrued interest at a rate of LIBOR plus 2.5% per annum and was repaid and extinguished during the first quarter 2018.

The Amended and Restated Credit Agreement contains certain affirmative and negative covenants including negative covenants that limit or restrict secured and unsecured indebtedness, mergers and fundamental changes, investments and acquisitions, liens and encumbrances, dividends, transactions with affiliates, burdensome agreements, changes in fiscal year and other matters customarily restricted in such agreements. The material financial covenants include minimum net worth and debt service coverage ratios and maximum leverage and dividend payout ratios. As of June 30, 2019, we were in compliance with all covenants related to the Fourth Amended and Restated Credit Agreement. Our results with respect to such compliance are presented in Note 9 to the Company's Consolidated Financial Statements.

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On February 28, 2017, we entered into a revolving acquisition credit agreement, or Acquisition Credit Agreement, with KeyBank to obtain an acquisition revolving credit facility, or Acquisition Facility, with a maximum borrowing capacity of $200 million. The sole purpose of the Acquisition Credit Agreement is to finance our acquisitions of multifamily communities and student housing communities prior to obtaining permanent conventional mortgage financing on the acquired assets. The maximum borrowing capacity on the Acquisition Facility was reduced by agreement with KeyBank to $90 million on March 25, 2019. The Acquisition Facility accrues interest at a variable rate of one month LIBOR plus a margin of between 1.75% per annum and 2.20% per annum, depending on the type of assets acquired and the resulting property debt service coverage ratio. The Acquisition Facility has a maturity date of March 1, 2022 and has two one-year extension options, subject to certain conditions described therein.

Our net cash provided by operating activities for the six-month periods ended June 30, 2019 and 2018 was approximately $74.6 million and $73.2 million, respectively. The increase in net cash provided by operating activities was primarily due to incremental cash generated by property income provided by real estate assets acquired since June 30, 2018.

The majority of our revenue is derived from residents and tenants under existing leases at our multifamily communities, student housing properties, grocery-anchored shopping centers and office properties. Therefore, our operating cash flow is principally dependent on: (1) the number of multifamily communities, student housing properties, grocery-anchored shopping centers and office properties in our portfolio; (2) rental rates; (3) occupancy rates; (4) operating expenses associated with these properties; and (5) the ability of our residents and tenants to make their rental payments.

We also earn interest revenue from the issuance of real estate-related loans and may receive fees at the inception of these loans for committing and originating them. Interest revenue we receive on these loans is influenced by (1) market interest rates on similar loans; (2) the availability of credit from alternative financing sources; (3) the desire of borrowers to finance new real estate projects; and (4) unique characteristics attached to these loans, such as exclusive purchase options. In the course of extending real estate loan investments for property development, we will often receive an exclusive option to purchase the property once development and stabilization are complete. If we do not wish to acquire the property, we have the right to sell the purchase option back to the borrower for a termination fee in the amount of the purchase option discount, which is recognized as interest income over the earlier of the maturity date of the loan or the sale of the property.

Interest income on our loans and notes receivable decreased from $32.6 million for the six-month period ended June 30, 2018 to $30.8 million for the six-month period ended June 30, 2019, primarily due to the repayment or settlement since June 30, 2018 of 11 real estate loan investments with an aggregate commitment amount of $150.0 million which supported seven real estate development projects.

Our net cash used in investing activities for the six-month periods ended June 30, 2019 and 2018 was approximately $222.5 million and $371.6 million, respectively. Cash disbursed for property acquisitions decreased from $405.9 million in the 2018 period to $154.6 million in the 2019 period, partially offset by the investing cash inflow from the sale of mortgage-backed securities of approximately $53.4 million.

Cash used in investing activities is primarily driven by acquisitions and dispositions of multifamily properties, student housing properties, office properties and grocery-anchored shopping centers and acquisitions and maturities or other dispositions of real estate loans and other real estate and real estate-related assets, and secondarily by capital expenditures related to our owned properties. We will seek to acquire more multifamily communities, student housing properties, office properties and grocery-anchored shopping centers at costs that we expect will be accretive to our financial results. Capital expenditures may be nonrecurring and discretionary, as part of a strategic plan intended to increase a property’s value and corresponding revenue-generating power, or may be normally recurring and necessary to maintain the income streams and present value of a property. Certain capital expenditures may be budgeted and reserved for upon acquiring a property as initial expenditures necessary to bring a property up to our standards or to add features or amenities that we believe make the property a compelling value to prospective residents or tenants in its individual market. These budgeted nonrecurring capital expenditures in connection with an acquisition are funded from the capital source(s) for the acquisition and are not dependent upon subsequent property operational cash flows for funding.

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For the six-month period ended June 30, 2019, our capital expenditures for our multifamily communities, not including changes in related payables were as follows:

	Capital Expenditures
	Recurring				Non-recurring				Total
(in thousands, except per-unit amounts)	Amount		Per Unit		Amount		Per Unit		Amount		Per Unit
Appliances	$	223	$	22.41	$	—	$	—	$	223	$	22.41
Carpets	642		64.49		—		—		642		64.49
Wood flooring / vinyl	212		21.31		17		1.73		229		23.04
Blinds and ceiling fans	75		7.46		15		1.49		90		8.95
Fire safety	—		—		101		10.18		101		10.18
Furnace, air (HVAC)	203		20.40		13		1.28		216		21.68
Computers, equipment, misc.	8		0.79		119		11.92		127		12.71
Elevators	—		—		33		3.35		33		3.35
Exterior painting	—		—		536		53.79		536		53.79
Leasing office / common amenities	180		18.07		783		78.62		963		96.69
Major structural	—		—		1,343		134.81		1,343		134.81
Cabinets & countertop upgrades	—		—		405		40.67		405		40.67
Landscaping & fencing	—		—		802		80.55		802		80.55
Parking lot	—		—		276		27.67		276		27.67
Signage and sanitation	—		—		82		8.23		82		8.23
	$	1,543	$	154.93	$	4,525	$	454.29	$	6,068	$	609.22

For the six-month period ended June 30, 2019, our capital expenditures for our student housing properties, not including changes in related payables were as follows:

	Capital Expenditures
	Recurring				Non-recurring				Total
(in thousands, except per-unit amounts)	Amount		Per Bed		Amount		Per Bed		Amount		Per Bed
Appliances	$	36	$	6.41	$	—	$	—	$	36	$	6.41
Carpets	8		1.41		—		—		8		1.41
Wood flooring / vinyl	5		0.83		10		1.69		15		2.52
Blinds and ceiling fans	4		0.72		—		—		4		0.72
Fire safety	—		—		151		26.69		151		26.69
Furnace, air (HVAC)	17		3.04		145		25.48		162		28.52
Computers, equipment, misc.	5		0.91		76		13.35		81		14.26
Elevators	—		—		—		—		—		—
Exterior painting	—		—		602		106.14		602		106.14
Leasing office / common amenities	26		4.50		225		39.63		251		44.13
Major structural	—		—		1,519		267.68		1,519		267.68
Cabinets & countertop upgrades	93		16.35		21		3.69		114		20.04
Landscaping & fencing	—		—		418		73.79		418		73.79
Parking lot	—		—		73		12.83		73		12.83
Signage and sanitation	—		—		78		13.79		78		13.79
	$	194	$	34.17	$	3,318	$	584.76	$	3,512	$	618.93

In addition, second-generation capital expenditures within our grocery-anchored shopping center portfolio for the six-month periods ended June 30, 2019 and 2018 totaled $559,000 and $531,000, respectively. We define second-generation capital expenditures as those that exclude expenditures made in our grocery-anchored shopping center portfolio (i) to lease space to "first generation" tenants (i.e. leasing capital for existing vacancies and known move-outs at the time of acquisition), (ii) to bring recently acquired properties up to our ownership standards, and (iii) for property re-developments and repositioning.

Second-generation capital expenditures within our office properties portfolio for the six-month periods ended June 30, 2019 and 2018 totaled $446,000 and $100,000, respectively. Second-generation capital expenditures exclude those expenditures

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made in our office properties portfolio (i) to lease space to "first generation" tenants (i.e. leasing capital for existing vacancies and known move-outs at the time of acquisition), (ii) to bring recently acquired properties up to our Class A ownership standards (and which amounts were underwritten into the total investment at the time of acquisition) and (iii) for property re-developments and repositionings.

At June 30, 2019, we had restricted cash of approximately $14.2 million that was contractually restricted to fund capital expenditures and other property-level commitments such as tenant improvements and leasing commissions.

Net cash provided by financing activities was approximately $204.7 million and $300.7 million for the six-month periods ended June 30, 2019 and 2018, respectively. Our significant financing cash sources were approximately $145.9 million and $211.9 million of net proceeds from the mortgage financing transactions for the six-month periods ended June 30, 2019 and 2018, respectively, and approximately $257.5 million and $204.2 million for the six-month periods ended June 30, 2019 and 2018, respectively, of net proceeds from our offerings of our Preferred Stock Units.

Distributions

In order to maintain our status as a REIT for U.S. federal income tax purposes, we must comply with a number of organizational and operating requirements, including a requirement to distribute 90% of our annual REIT taxable income (which does not equal net income as calculated in accordance with GAAP and determined without regard for the deduction for dividends paid and excluding net capital gains) to our stockholders. As a REIT, we generally will not be subject to federal income taxes on the taxable income we distribute to our stockholders. Generally, our objective is to meet our short-term liquidity requirement of funding the payment of our quarterly Common Stock dividends, as well as monthly dividends to holders of our Series A Redeemable Preferred Stock and our mShares, through net cash generated from operating results.

Our board of directors reviews the Series A Redeemable Preferred Stock and our mShares dividends monthly to determine whether we have funds legally available for payment of such dividends in cash, and there can be no assurance that the Series A Redeemable Preferred Stock and our mShares dividends will consistently be paid in cash. Dividends may be paid as a combination of cash and stock in order to satisfy the annual distribution requirements applicable to REITs. We expect the aggregate dollar amount of monthly Series A Redeemable Preferred Stock and our mShares dividend payments to increase at a rate that approximates the rate at which we issue new Units from our $1.5 Billion Unit Offering and mShares from our mShares Offering, less those shares redeemed.

Our second quarter 2019 Common Stock dividend declaration of $0.2625 per share represented an overall increase of 110% from our initial Common Stock dividend per share of $0.125 following our IPO, or an average annual dividend growth rate of approximately 13.8% over the same period. Our board of directors reviews the proposed Common Stock dividend declarations quarterly, and there can be no assurance that the current dividend level will be maintained.

We believe that our short-term liquidity needs are and will continue to be adequately funded.

For the three-month period ended June 30, 2019, our aggregate dividends and distributions totaled approximately $39.4 million and our cash flows from operating activities were approximately $48.3 million. We expect our cash flow from operations over time to be sufficient to fund our quarterly Common Stock dividends, Class A Unit distributions and our monthly Series A Redeemable Preferred Stock and mShares dividends.

Long-Term Liquidity Needs

We believe our principal long-term liquidity needs are to fund:

• the principal amount of our long-term debt as it becomes due or matures;

• capital expenditures needed for our multifamily communities, student housing properties, grocery-anchored shopping centers and office properties;

• costs associated with current and future capital raising activities;

• costs to acquire additional multifamily communities, student housing properties, grocery-anchored shopping centers, office properties or other real estate and enter into new and fund existing lending opportunities; and

• our minimum distributions necessary to maintain our REIT status.

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We intend to finance our future investments with the net proceeds from additional issuances of our securities, including our $1.5 Billion Unit Offering, our mShares Offering (both as defined below), Common Stock, and units of limited partnership interest in our Operating Partnership, and/or borrowings. The success of our acquisition strategy may depend, in part, on our ability to access further capital through issuances of additional securities, especially our $1.5 Billion Unit Offering, details of which are described below. If we are unsuccessful in raising additional funds, we may not be able to obtain any assets in addition to those we have acquired.

On February 14, 2017, the SEC declared effective our registration statement on Form S-3 (Registration No. 333-211924) for our offering for up to 1,500,000 Units, with each Unit consisting of one share of Series A Redeemable Preferred Stock and one Warrant to purchase up to 20 shares of Common Stock, referred to as our $1.5 Billion Unit Offering. The price per Unit is $1,000, subject to adjustment if a participating broker-dealer reduces its commission. We intend to invest substantially all the net proceeds of the $1.5 Billion Unit Offering in connection with the acquisition of multifamily communities, student housing communities, grocery-anchored shopping centers, office buildings and other real estate-related investments and general working capital purposes.

Aggregate offering expenses, including selling commissions and dealer manager fees, will be capped at 11.5% of the aggregate gross proceeds of the $1.5 Billion Unit Offering, of which we will reimburse our Manager up to 1.5% of the gross proceeds of these offerings for all organization and offering expenses incurred, excluding selling commissions and dealer manager fees; however, upon approval by the conflicts committee of our board of directors, we may reimburse our Manager for any such expenses incurred above the 1.5% amount as permitted by the Financial Industry Regulatory Authority.

On December 2, 2016, the SEC declared effective our registration statement on Form S-3 (Registration No. 333-214531), for our offering of up to 500,000 shares of Series M Redeemable Preferred Stock, or mShares, par value $0.01 per share, or the mShares Offering. The price per mShare is $1,000. We intend to invest substantially all the net proceeds of the mShares Offering in connection with the acquisition of multifamily communities, student housing communities, grocery-anchored shopping centers, office buildings and other real estate-related investments and general working capital purposes. 

At June 30, 2019, the Company's active equity offerings consisted of:

• an offering of a maximum of 1,500,000 Units, with each Unit consisting of one share of Series A Redeemable Preferred Stock and one Warrant to purchase up to 20 shares of Common Stock (the "$1.5 Billion Unit Offering");

• an offering of up to a maximum of 500,000 shares of Series M Redeemable Preferred Stock (“mShares”), par value $0.01 per share (the “mShares Offering”); and

• an offering of up to $400 million of equity or debt securities (the "2019 Shelf Offering"), including an offering of up to $125 million of Common Stock from time to time in an "at the market" offering (the "2019 ATM Offering").

For the three months and six months ended June 30, 2019, no shares of our common stock were issued under our previously expired at-the-market offering of up to $150 million of common stock or our 2019 ATM Offering.

Our ability to raise funds through the issuance of our securities is dependent on, among other things, general market conditions for REITs, market perceptions about us, and the current trading price of our Common Stock. We will continue to analyze which source of capital is most advantageous to us at any particular point in time, but the equity and credit markets may not consistently be available on terms that are attractive to us or at all.

The sources to fulfill our long-term liquidity in the future may include borrowings from a number of sources, including repurchase agreements, securitizations, resecuritizations, warehouse facilities and credit facilities (including term loans and revolving facilities), in addition to our Revolving Line of Credit. We have utilized, and we intend to continue to utilize, leverage in making our investments in multifamily communities and retail shopping centers. The number of different multifamily communities, retail shopping centers and other investments we will acquire will be affected by numerous factors, including the amount of funds available to us. By operating on a leveraged basis, we will have more funds available for our investments. This will allow us to make more investments than would otherwise be possible, resulting in a larger and more diversified portfolio.

We intend to target leverage levels (secured and unsecured) between 50% and 65% of the fair market value of our tangible assets (including our real estate assets, real estate loans, notes receivable, accounts receivable and cash and cash equivalents) on a portfolio basis. As of June 30, 2019, our outstanding debt (both secured and unsecured) was approximately 49.8% of the value of our tangible assets on a portfolio basis based on our estimates of fair market value at June 30, 2019. Neither our charter nor our

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by-laws contain any limitation on the amount of leverage we may use. Our investment guidelines, which can be amended by our board without stockholder approval, limit our borrowings (secured and unsecured) to 75% of the cost of our tangible assets at the time of any new borrowing. These targets, however, will not apply to individual real estate assets or investments. The amount of leverage we will place on particular investments will depend on our Manager's assessment of a variety of factors which may include the anticipated liquidity and price volatility of the assets in our investment portfolio, the potential for losses and extension risk in the portfolio, the availability and cost of financing the asset, our opinion of the creditworthiness of our financing counterparties, the health of the U.S. economy and the health of the commercial real estate market in general. In addition, factors such as our outlook on interest rates, changes in the yield curve slope, the level and volatility of interest rates and their associated credit spreads, the underlying collateral of our assets and our outlook on credit spreads relative to our outlook on interest rate and economic performance could all impact our decision and strategy for financing the target assets. At the date of acquisition of each asset, we anticipate that the investment cost for such asset will be substantially similar to its fair market value. However, subsequent events, including changes in the fair market value of our assets, could result in our exceeding these limits. Finally, we intend to acquire all our real estate assets through separate single purpose entities and we intend to finance each of these assets using debt financing techniques for that asset alone without any cross-collateralization to our other real estate assets or any guarantees by us or our Operating Partnership. We intend to have no long-term unsecured debt at the Company or Operating Partnership levels, except for our Revolving Line of Credit.

Our secured and unsecured aggregate borrowings are intended by us to be reasonable in relation to our tangible assets and will be reviewed by our board of directors at least quarterly. In determining whether our borrowings are reasonable in relation to our tangible assets, we expect that our board of directors will consider many factors, including without limitation the lending standards of government-sponsored enterprises, such as Fannie Mae and Freddie Mac, for loans in connection with the financing of multifamily properties, the leverage ratios of publicly traded and non-traded REITs with similar investment strategies, and general market conditions. There is no limitation on the amount that we may borrow for any single investment.

Our ability to incur additional debt is dependent on a number of factors, including our credit ratings (if any), the value of our assets, our degree of leverage and borrowing restrictions imposed by lenders. We will continue to monitor the debt markets, including Fannie Mae and/or Freddie Mac (from both of whom we have obtained single asset secured financing on all of our multifamily communities), and as market conditions permit, access borrowings that are advantageous to us.

If we are unable to obtain financing on favorable terms or at all, we may have to curtail our investment activities, including acquisitions and improvements to real properties, which could limit our growth prospects. This, in turn, could reduce cash available for distribution to our stockholders and may hinder our ability to raise capital by issuing more securities or borrowing more money. We may be forced to dispose of assets at inopportune times in order to maintain our REIT qualification and Investment Company Act exemption. Our ability to generate cash from asset sales is limited by market conditions and certain rules applicable to REITs. We may not be able to sell a property or properties as quickly as we would like or on terms as favorable as we would like.

Furthermore, if interest rates or other factors at the time of financing result in higher costs of financing, then the interest expense relating to that financed indebtedness would be higher. Higher interest rates on newly incurred debt may negatively impact us as well. If interest rates increase, our interest costs and overall costs of capital will increase, which could adversely affect our transaction and development activity, financial condition, results of operations, cash flow, our ability to pay principal and interest on our debt and our ability to pay distributions to our stockholders. Finally, sellers may be less inclined to offer to sell to us if they believe we may be unable to obtain financing.

As of June 30, 2019, we had long term mortgage indebtedness of approximately $2.4 billion, all of which was incurred by us in connection with the acquisition or refinancing of our real estate properties.

As of June 30, 2019, we had approximately $94.0 million in unrestricted cash and cash equivalents available to meet our short-term and long-term liquidity needs. We believe that our long-term liquidity needs are and will continue to be adequately funded through the sources discussed above.

Off-Balance Sheet Arrangements

As of June 30, 2019, we had 1,362,198 outstanding Warrants from our sales of Units. The Warrants are exercisable by the holder at an exercise price of 120% of the current market price per share of the Common Stock on the date of issuance of such Warrant, with a minimum exercise price of $19.50 per share for Warrants issued after February 15, 2017. The current market price per share is determined using the closing market price of the Common Stock immediately preceding the issuance of the Warrant. The Warrants are not exercisable until one year following the date of issuance and expire four years following the date of issuance. As of June 30, 2019, a total of 516,494 Warrants had been exercised into 10,329,880 shares of Common stock. The 1,362,198 Warrants outstanding at June 30, 2019 have exercise prices that range between $12.29 and $26.34 per share. If all the Warrants outstanding at June 30, 2019 became exercisable and were exercised, gross proceeds to us would be approximately $519.0 million and we would as a result issue an additional 27,243,960 shares of Common Stock.

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Contractual Obligations

As of June 30, 2019, our contractual obligations consisted of the mortgage notes secured by our acquired properties and the Revolving Credit Facility. Based on a LIBOR rate of 2.4% at June 30, 2019, our estimated future required payments on these instruments were:

(in thousands)	Total		Less than one year		1-3 years		3-5 years		More than five years
Mortgage debt obligations:
Interest	$	787,216	$	99,665	$	181,632	$	148,546	$	357,373
Principal	2,469,845		170,813		249,318		385,736		1,663,978
Line of Credit:
Interest	—		—		—		—		—
Principal	—		—		—		—		—
Total	$	3,257,061	$	270,478	$	430,950	$	534,282	$	2,021,351

In addition, we had unfunded real estate loan balances totaling approximately $81.0 million at June 30, 2019.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our primary market risk exposure is interest rate risk. All our floating-rate debt is tied to the 30-day LIBOR. As of June 30, 2019, we have variable rate mortgages on the properties listed in following table.

	Balance (in thousands)		Percentage of total mortgage indebtedness		LIBOR Cap		All-in Cap
Avenues at Creekside	$	39,284			5.0	%	6.6	%
Citi Lakes	41,198				4.3	%	6.5	%
The Tradition	30,000				3.3	%	7.3	%
The Bloc	28,966				3.3	%	6.8	%
Total capped floating-rate debt	139,448		5.7	%
Ursa	31,400				n/a		n/a
Haven 49	41,550				n/a		n/a
Champions Village	27,400				n/a		n/a
Total uncapped floating-rate debt	100,350		4.1	%
Total floating-rate debt	$	239,798	9.7	%

Our Revolving Line of Credit accrued interest at a spread of 3.0% over LIBOR as of June 30, 2019; this combined rate is uncapped. Because of the short term nature of the Revolving Line of Credit and Acquisition Credit Facility instruments, we believe our interest rate risk is minimal. We have no business operations which subject us to trading risk and no recourse liability or market or interest rate exposure to the consolidated VIE liabilities of the mortgage-backed pools from the Freddie Mac K Program.

We have and will continue to manage interest rate risk as follows:

• maintain a reasonable ratio of fixed-rate, long-term debt to total debt so that floating-rate exposure is kept at an acceptable level;

• place interest rate caps on floating-rate debt where appropriate; and

• take advantage of favorable market conditions for long-term debt and/or equity financings.

We use various financial models and advisors to achieve our objectives.

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If interest rates under our floating-rate LIBOR-based indebtedness fluctuated by 100 basis points, our interest costs, based on outstanding borrowings at June 30, 2019, would increase by approximately $2.2 million or decrease by approximately $2.1 million on an annualized basis.

Item  4. Controls and Procedures

Evaluation of disclosure controls and procedures.

Management of the Company evaluated, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Accounting Officer, the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in the Exchange Act Rule 13a-15(e)) as of June 30, 2019, the end of the period covered by this report. Based on that evaluation, the Company's Chief Executive Officer and Chief Accounting Officer have concluded that the Company's disclosure controls and procedures were effective as of the end of such period to provide reasonable assurance that that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Accounting Officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in internal control over financial reporting.

As required by the Exchange Act Rule 13a-15(d), the Company's Chief Executive Officer and Chief Accounting Officer evaluated the Company's internal control over financial reporting to determine whether any change occurred during the quarter ended June 30, 2019 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. Based on that evaluation, there has been no such change during such period.

Item 1. Legal Proceedings

Neither we nor our subsidiaries nor, to our knowledge, our Manager is currently subject to any legal proceedings that we or our Manager consider to be material. To our knowledge, none of our communities are currently subject to any legal proceeding that we consider material.

Item 1A.Risk Factors

There have been no material changes to our potential risks and uncertainties presented in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the twelve months ended December 31, 2018 that was filed with the SEC on March 1, 2019.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item  6. Exhibits

See Exhibit Index.

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EXHIBIT INDEX
Exhibit Number		Description
10.1	+	2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed by the Company with the Securities and Exchange Commission on May 2, 2019).
10.2	+	Form of Restricted Stock Agreement pursuant to the Preferred Apartment Communities, Inc. 2011 Stock Incentive Plan (incorporated by reference to Exhibit 10.9 to Pre-effective Amendment No. 6 to Form S-11 Registration Statement (Registration No. 333-168407) filed by the Company with the Securities and Exchange Commission on March 4, 2011)
10.3		Sales Agreement dated June 21, 2019 by and between Preferred Apartment Communities, Inc. and RBC Capital Markets, LLC, JonesTrading Institutional Services LLC, B. Riley FBR, Inc., Compass Point Research & Trading, LLC, D.A. Davidson & Co., JMP Securities LLC, and National Securities Corporation (incorporated by reference to Exhibit 10.1 to Form 8-K filed by the Company with the Securities and Exchange Commission on June 24, 2019)
31.1	*	Certification of Daniel M. DuPree, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification of John A. Isakson, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	*	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	*	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	*	XBRL (eXtensible Business Reporting Language). The following materials from Preferred Apartment Communities, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2019, formatted in XBRL: (i) Consolidated balance sheets at June 30, 2019 and December 31, 2018, (ii) consolidated statements of operations for the three months and six months ended June 30, 2019 and 2018, (iii) consolidated statements of stockholders' equity, (iv) consolidated statement of cash flows and (v) notes to consolidated financial statements.
	*	Filed or Furnished herewith
	+	Management contract or compensatory plan, contract or arrangement

75

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
		PREFERRED APARTMENT COMMUNITIES, INC.
Date: August 1, 2019	By:	/s/ Daniel M. DuPree
		Daniel M. DuPree
		Chief Executive Officer
		(Principal Executive Officer)
Date: August 1, 2019	By:	/s/ John A. Isakson
		John A. Isakson
		Chief Financial Officer
		(Principal Financial Officer)

76

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Daniel M. DuPree, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Preferred Apartment Communities, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2019	/s/ Daniel M. DuPree
	Daniel M. DuPree
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, John A. Isakson, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Preferred Apartment Communities, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2019	/s/ John A. Isakson
	John A. Isakson
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Furnished (but not filed) as an exhibit to the periodic report identified in the Certification.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Preferred Apartment Communities, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2019 as filed with the Securities and Exchange Commission (the "Report"), I, Daniel M. DuPree, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 1, 2019	/s/ Daniel M. DuPree
	Daniel M. DuPree
	Chief Executive Officer

EX-32.2

Exhibit 32.2

Furnished (but not filed) as an exhibit to the periodic report identified in the Certification.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Preferred Apartment Communities, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2019 as filed with the Securities and Exchange Commission (the "Report"), I, John A. Isakson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 1, 2019	/s/ John A. Isakson
	John A. Isakson
	Chief Financial Officer

XML

Document and Entity Information Document - shares	6 Months Ended
	Jun. 30, 2019	Jul. 26, 2019
Document and Entity Information
entity registrant name	PREFERRED APARTMENT COMMUNITIES INC
entity CIK	0001481832
Current fiscal year end date	--12-31
document type	10-Q
document period end date	Jun. 30, 2019
document fiscal year focus	2019
entity filer category	Accelerated Filer
document fiscal period focus	Q2
Entity Current Reporting Status	Yes
amendment flag	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
entity common stock, shares outstanding		44,456,571

XML

Balance Sheets - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Real estate
Land	$ 571,776,000	$ 519,300,000
Building and improvements	2,902,740,000	2,738,085,000
Tenant Improvements	141,339,000	128,914,000
Furniture, fixtures, and equipment	298,891,000	278,151,000
Construction in progress	9,418,000	8,265,000
Gross real estate	3,924,164,000	3,672,715,000
Less: accumulated depreciation	(344,702,000)	(272,042,000)
Net real estate	3,579,462,000	3,400,673,000
Real estate loans	335,292,000	282,548,000
Loans and Leases Receivable, Related Parties	24,888,000	51,663,000
Total real estate and real estate loan, net	3,939,642,000	3,734,884,000
Cash and cash equivalents	94,081,000	38,958,000
Restricted cash	50,478,000	48,732,000
Financing Receivable, Net	19,241,000	14,440,000
Note receivable	57,310,000
Due from Related Parties, Current	25,902,000	32,867,000
Interest Receivable	24,406,000	23,340,000
Intangible Assets, Net (Excluding Goodwill)	138,418,000	135,961,000
Deferred loan costs, net of amortization of $155,953 and $64,480	(1,591,000)	(1,916,000)
Deferred offering costs	3,684,000	6,468,000
tenants capitalized lease inducements	20,151,000	20,698,000
Other Receivables	0	41,181,000
Other assets	66,795,000	41,567,000
Variable Interest Entity, Consolidated, Assets, Pledged	596,129,000	269,946,000
Total assets	4,980,518,000	4,410,958,000
Liabilities
Mortgage notes payable	2,429,242,000	2,299,625,000
Accounts payable and accrued expenses	49,819,000	38,618,000
Line of Credit Facility, Amount Outstanding	0	57,000,000
Participating Mortgage Loans, Participation Liabilities, Amount	0	5,181,000
unearned revenue from purchase option termination fees	5,893,000	2,050,000
Interest Payable, Current	7,492,000	6,711,000
Dividends payable	21,425,000	19,258,000
Below Market Lease, Net	51,801,000	47,149,000
Security deposits and prepaid rents	17,074,000	17,611,000
Deferred income	41,603,000	43,484,000
Variable Interest Entity, Consolidated, Liabilities, Recourse	571,999,000	264,886,000
Total liabilities	3,196,348,000	2,801,573,000
Stockholder's equity
Common Stock, $0.01 par value per share; 400,066,666 shares authorized; 5,179,093 and 5,149,325 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively	442,000	418,000
Additional paid in capital	1,784,197,000	1,607,712,000
Accumulated deficit	0	0
Total stockholders' equity	1,784,658,000	1,608,146,000
Non-controlling interest	(488,000)	1,239,000
Total equity	1,784,170,000	1,609,385,000
Total liabilities and equity	4,980,518,000	4,410,958,000
Series A Preferred Stock [Member]
Stockholder's equity
Series A Redeemable Preferred Stock, $0.01 par value per share; 150,000 shares authorized; 12,178 and 0 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively	18,000	16,000
Series M Preferred Stock [Member]
Stockholder's equity
Series A Redeemable Preferred Stock, $0.01 par value per share; 150,000 shares authorized; 12,178 and 0 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively	1,000	$ 0
Mortgages [Member]
Liabilities
Mortgage notes payable	$ 2,469,845,000

XML

Balance Sheets (Parentheticals) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Accumulated Depreciation, Depletion and Amortization, Sale or Disposal of Property, Plant and Equipment	$ 344,702,000	$ 272,042,000
Finite-Lived Intangible Assets, Accumulated Amortization	122,735,000	113,199,000
sales inducements accumulated amortization	2,261,000	1,833,000
Allowance for Doubtful Accounts Receivable	0	1,662,000
Below Market Lease, Accumulated Amortization	$ 17,280,000	$ 15,254,000
Common Stock, par value per share	$ 0.01
Common stock, shares outstanding	44,246,703
Series A Preferred Stock [Member]
Series A Redeemable Preferred Stock, par value per share	$ 0.01	$ 0.01
Preferred stock, shares authorized	3,050,000	3,050,000
Preferred stock, shares issued	1,929,000	1,674,000
Shares outstanding, preferred stock	1,829,000	1,608,000
Series M Preferred Stock [Member]
Series A Redeemable Preferred Stock, par value per share	$ 0.01
Preferred stock, shares authorized	500,000
Preferred stock, shares issued	74,000	44,000
Shares outstanding, preferred stock	73,000	44,000
Common Stock [Member]
Common Stock, par value per share	$ 0.01	$ 0.01
Common stock, shares authorized	400,067,000	400,067,000
Common Stock, Shares, Issued	43,238,000	41,776,000
Common stock, shares outstanding	43,238,000	41,776,000
Line of Credit [Member]
Deferred loan costs, accumulated amortization	$ 346,000	$ 180,000
Mortgages [Member]
Deferred loan costs, accumulated amortization	$ 40,314,000	$ 40,127,000

XML

Statements of Operations - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues:
Rental revenues	$ 95,592,000	$ 76,552,000	$ 187,830,000	$ 150,814,000
Other property revenues	3,512,000	1,805,000	5,690,000	3,348,000
Interest income on loan and note receivable	12,093,000	13,658,000	23,381,000	23,958,000
Revenue from Related Parties	1,632,000	4,374,000	7,434,000	8,639,000
miscellaneous revenues	1,023,000	0	1,023,000	0
Total revenues	113,852,000	96,389,000	225,358,000	186,759,000
Operating expenses:
Property operating and maintenance	12,466,000	10,107,000	23,258,000	18,912,000
property salaries related party	4,828,000	4,228,000	9,485,000	8,127,000
Property management fees	3,373,000	2,776,000	6,640,000	5,532,000
Real estate taxes	12,544,000	10,063,000	25,044,000	20,038,000
General and administrative	1,913,000	1,957,000	4,527,000	3,798,000
Share-based Compensation	306,000	950,000	617,000	2,085,000
Depreciation and amortization	45,663,000	42,095,000	90,952,000	82,711,000
Management fees	8,209,000	6,621,000	16,038,000	12,862,000
Allowance for Loan and Lease Losses, Loans Acquired	0	0	0	0
Other Expenses	2,690,000	2,008,000	5,218,000	3,453,000
Total operating expenses	91,992,000	80,805,000	181,779,000	157,518,000
manager's fees deferred	2,795,000	1,429,000	5,424,000	2,649,000
Operating Expenses	89,197,000	79,376,000	176,355,000	154,869,000
Operating Income (Loss)	24,655,000	17,015,000	49,007,000	52,246,000
Interest Expense	27,611,000	22,347,000	54,367,000	43,315,000
Gain (Loss) on Extinguishment of Debt	52,000	0	69,000	0
Gain (Loss) on Sales of Loans, Net	747,000	0	747,000	0
Income (Loss) before Gain (Loss) on Sale of Properties	24,655,000	17,013,000	49,003,000	31,890,000
Gains (Losses) on Sales of Investment Real Estate	0	2,000	4,000	20,356,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(1,677,000)	(5,278,000)	(3,957,000)	8,985,000
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest	(1,677,000)	(5,278,000)	(3,957,000)	8,985,000
net loss attributable to non-controlling interests	(571,000)	(140,000)	(79,000)	240,000
Net loss attributable to the Company	(1,106,000)	(5,138,000)	(3,878,000)	8,745,000
Dividends to preferred stockholders	27,542,000	20,924,000	53,081,000	40,441,000
Deemed noncash dividend			210,000	153,000
NetIncomeAllocatedToUnvestedRestrictedShares	(7,000)	(6,000)	(9,000)	(8,000)
Net Income (Loss) Available to Common Stockholders, Basic	$ (28,655,000)	$ (26,068,000)	$ (56,968,000)	$ (31,704,000)
Earnings Per Share, Basic	$ (0.66)	$ (0.66)	$ (1.32)	$ (0.81)
Dividends, Common Stock, Cash	$ 11,581,000	$ 10,104,000	$ 22,776,000	$ 19,906,000
Common Stock, Dividends, Per Share, Declared			$ 0.5225	$ 0.505
Weighted Average Number of Shares Outstanding, Diluted	43,703	39,383	43,194	39,241
Fair Value, Assets Measured on Recurring Basis, Change in Unrealized Gain (Loss)	$ 584,000	$ 54,000	$ 725,000	$ 54,000

XML

Statements of Operations (Parenthetical) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Income Statement Parentheticals [Abstract]
property management fees paid to related party	$ 4,079,000	$ 3,609,000
acquisition fees paid to related party	$ 2,467,000	$ 2,105,000

XML

Statements of Cash Flows Statement - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018
Operating activities:
Net loss attributable to the Company	$ (1,106,000)	$ (5,138,000)	$ (3,878,000)	$ 8,745,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(1,677,000)	(5,278,000)	(3,957,000)	8,985,000
Reconciliation of net loss to net cash provided by (used in) operating activities:
Depreciation expense	45,663,000	42,095,000	90,952,000	82,711,000
Amortization of above and below Market Leases			(3,179,000)	(2,387,000)
Deferred fee income amortization			(2,782,000)	(2,154,000)
amortization of purchase option termination fee income			(5,617,000)	(2,236,000)
adjustment to net income MBS revenue amortization noncash			(415,000)	(54,000)
Deferred Sales Inducement Cost, Amortization Expense			991,000	699,000
Deferred loan cost amortization			3,139,000	3,279,000
deferred interest income			(4,416,000)	(5,261,000)
Fair Value, Assets Measured on Recurring Basis, Change in Unrealized Gain (Loss)	(584,000)	(54,000)	(725,000)	(54,000)
Share-based Compensation	306,000	950,000	617,000	2,085,000	$ 617,000
Gain (Loss) on Disposition of Assets			(4,000)	(20,356,000)
cash inflows purchase option terminations			1,330,000	5,100,000
Gain (Loss) on Extinguishment of Debt	52,000	0	69,000	0
Gain (Loss) on Sale of Mortgage Loans	(747,000)	0	(747,000)	0
cash inflows mortgage interest from consolidated VIE			8,015,000	861,000
mortgage interes cash outflows consolidated VIE			(8,015,000)	(861,000)
Changes in operating assets and liabilities:
(Increase) in tenant accounts receivable			(11,306,000)	(1,718,000)
Payments for (Proceeds from) Tenant Allowance			(314,000)	(4,972,000)
Loans and Leases Receivable, Allowance	0	0	0	0
(Increase) decrease in other assets			11,691,000	7,474,000
Increase in accounts payable and accrued expenses			(1,416,000)	1,968,000
Net cash provided by (used in) operating activities			74,636,000	73,163,000
Investing activities:
Investments in real estate loans			(53,497,000)	(117,771,000)
Proceeds from Principal Repayments on Loans and Leases Held-for-investment			0	130,185,000
Notes receivable issued			10,000	8,640,000
Deferred acquisition fee on real estate loans			(22,766,000)	(24,093,000)
Deferred real estate loan income			(4,792,000)	(716,000)
Acquisition of properties, net			(154,579,000)	(405,870,000)
Proceeds from Sale of Real Estate Held-for-investment			0	42,269,000
Receipt of insurance proceeds for capital improvements			746,000	412,000
Additions to real estate assets - improvements			(20,647,000)	(18,268,000)
Increase (Decrease) in Earnest Money Deposits Outstanding			(8,202,000)	(1,538,000)
AcquisitionFeesRelatedPartyCosts			(526,000)	(1,211,000)
Payments to Acquire Mortgage Backed Securities (MBS) categorized as Held-to-maturity			(18,656,000)	(4,739,000)
cash paid investment in CMBS			(12,278,000)	0
Proceeds from Sale of Mortgage-backed Securities (MBS), Available-for-sale			53,445,000	0
mortgage principal received from consolidated VIE			2,073,000	171,000
Increase (Decrease) in Accounts and Notes Receivable			16,103,000	18,652,000
Net cash (used in) investing activities			(222,515,000)	(371,455,000)
Financing activities:
Proceeds from mortgage notes payable			145,861,000	211,949,000
Extinguishment of Debt, Amount			(57,318,000)	(35,231,000)
Payments for mortgage loan costs			(3,267,000)	(4,359,000)
loan balance proceeds from real estate loan participants			0	5,000
payments received from real estate loan participants			(5,223,000)	(3,664,000)
Proceeds from non-revolving lines of credit			162,200,000	237,100,000
Payments on revolving lines of credit			(219,200,000)	(240,400,000)
Repayments of Short-term Debt			0	(11,000,000)
mortgage principal paid to consolidated VIE			(2,073,000)	(171,000)
cash flows financing proceeds repurchase agreements			4,857,000	0
cash flows financing repayments repurchase agreements			(4,857,000)	0
Proceeds from sales of Units, net of offering costs			257,466,000	204,201,000
Proceeds from Warrant Exercises			7,433,000	12,374,000
Preferred Stock, Redemption Amount			(5,115,000)
Dividends declared and paid			(22,036,000)	(8,994,000)
Payments of Ordinary Dividends, Preferred Stock and Preference Stock			(51,655,000)	(19,378,000)
Payments for deferred offering costs, net of non cash items			(1,868,000)	(489,000)
Net Cash Provided by (Used in) Financing Activities			204,748,000	300,565,000
Cash and Cash Equivalents, Period Increase (Decrease)			56,869,000	2,273,000
Cash beginning of period			87,690,000	73,012,000	$ 73,012,000
Cash end of period	144,559,000	75,285,000	144,559,000	75,285,000
Supplemental cash flow information:
Cash paid for interest			49,961,000	38,875,000
Noncash Investing and Financing Items [Abstract]
Accrued capital expenditures			5,294,000	1,621,000
Deemed noncash dividend			210,000	153,000
Dividends payable to non controlling interests			230,000	273,000
Payments of Ordinary Dividends, Noncontrolling Interest			(457,000)	(39,310,000)
Accrued and payable deferred offering costs			731,000	415,000
receivable for deferred offering costs			182,000	245,000
Writeoff of fully amortized deferred loan costs			541,000	1,331,000
Payments for Tenant Improvements			0	7,490,000
Variable Interest Entity, Consolidated, Assets, Noncurrent, Pledged	270,670,000	262,965,000	270,670,000	262,965,000
Variable Interest Entity, Consolidated, Liabilities, Noncurrent	270,670,000	262,965,000	270,670,000	262,965,000
Proceeds from Sale of Loans Receivable			763,000	0
Reclass of offering costs from deferred asset to equity			5,508,000	1,053,000
loan receivables converted to equity for property acquisition			47,797,000	0
Contribution from non-controlling interests				(2,068,000)
Loans Assumed			41,550,000	47,125,000
Share-based Compensation			719,000	4,972,000
Noncash settlement of loans			256,000	966,000
loan fees received			1,051,000	2,422,000
mortgage debt refinanced			24,477,000	37,485,000
Restricted Cash and Cash Equivalents	50,478,000		50,478,000
Common Stock [Member]
Noncash Investing and Financing Items [Abstract]
Dividends payable			11,581,000	10,104,000
Series A Preferred Stock [Member]
Noncash Investing and Financing Items [Abstract]
Dividends payable			9,009,000	6,952,000
Series M Preferred Stock [Member]
Noncash Investing and Financing Items [Abstract]
Dividends payable			625,000	129,000
Parent [Member]
Operating activities:
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ (1,106,000)	$ (5,138,000)	$ (3,878,000)	$ 8,745,000

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Statements of Equity and Accumulated Deficit - USD ($)	Total	Series A Preferred Stock [Member]	Series M Preferred Stock [Member]	Common Stock [Member]	Common Stock [Member] Series A Preferred Stock [Member]	Common Stock [Member] Series M Preferred Stock [Member]	Additional Paid-in Capital [Member]	Additional Paid-in Capital [Member] Series A Preferred Stock [Member]	Additional Paid-in Capital [Member] Series M Preferred Stock [Member]	Accumulated Deficit [Member]	Accumulated Deficit [Member] Series A Preferred Stock [Member]	Accumulated Deficit [Member] Series M Preferred Stock [Member]	Total Stockholders' Equity [Member]	Total Stockholders' Equity [Member] Series A Preferred Stock [Member]	Total Stockholders' Equity [Member] Series M Preferred Stock [Member]	Noncontrolling Interest [Member]	Noncontrolling Interest [Member] Series A Preferred Stock [Member]	Noncontrolling Interest [Member] Series M Preferred Stock [Member]	Preferred Stock [Member]	Preferred Stock [Member] Series A Preferred Stock [Member]	Preferred Stock [Member] Series M Preferred Stock [Member]	ClassBUnits [Member]	ClassBUnits [Member] Common Stock [Member]	ClassBUnits [Member] Additional Paid-in Capital [Member]	ClassBUnits [Member] Accumulated Deficit [Member]	ClassBUnits [Member] Total Stockholders' Equity [Member]	ClassBUnits [Member] Noncontrolling Interest [Member]	ClassBUnits [Member] Preferred Stock [Member] Series A Preferred Stock [Member]	ClassBUnits [Member] Preferred Stock [Member] Series M Preferred Stock [Member]
Proceeds from Issuance of Preferred Stock and Preference Stock	$ 13,569,000	$ 210,844,000			$ 0	$ 0	$ 13,569,000	$ 210,842,000		$ 0	$ 0		$ 13,569,000	$ 210,844,000						$ 2,000	$ 0
Balance at Dec. 31, 2017	1,280,766,000			$ 386,000			1,271,040,000			4,449,000			1,275,887,000			$ 4,879,000				12,000
Stock Redeemed or Called During Period, Value	(9,059,000)			4,000			(9,063,000)			0			(9,059,000)			0				0
exercise of warrants	8,377,000			6,000			8,371,000			0			8,377,000			0				0
Stock Issued During Period, Value, Conversion of Units	0			1,000			850,000			0			851,000			(851,000)				0
amortization of Class A Unit awards																						$ 1,807,000	$ 0	$ 0	$ 0	$ 0	$ 1,807,000	$ 0
Syndication and offering costs	(21,201,000)			0			(21,201,000)			0			(21,201,000)			0				0
Stock Issued During Period, Value, Share-based Compensation, Gross	278,000			0			278,000			0			278,000			0				0
Dividends, Common Stock, Cash	(19,906,000)			0			(19,906,000)			0			(19,906,000)			0			$ 0
Balance at Jun. 30, 2018	1,433,477,000			397,000			1,430,713,000			0			1,431,124,000			2,353,000				14,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	8,985,000			0			0			8,745,000			8,745,000			240,000				0
non-controlling interest equity adjustment	0			0			3,180,000			0			3,180,000			(3,180,000)				0
Payments to Noncontrolling Interests	(542,000)			0			0			0			0			(542,000)				0
Dividends, Preferred Stock	(704,000)	(39,737,000)			0		(475,000)	(26,772,000)		(229,000)	(12,965,000)		(704,000)	(39,737,000)		0	$ 0			0	0
Proceeds from Issuance of Preferred Stock and Preference Stock	113,449,000			0			113,448,000						113,449,000							1,000		8,360,000	0	8,360,000	0	8,360,000	0		$ 0
Balance at Mar. 31, 2018	1,360,832,000			392,000			1,357,725,000			0			1,358,130,000			2,702,000				13,000
Stock Redeemed or Called During Period, Value	(3,293,000)			4,000			(3,297,000)			0			(3,293,000)			0
exercise of warrants	1,187,000			1,000			1,186,000			0			1,187,000			0				0
Stock Issued During Period, Value, Conversion of Units	0			0			0			0			0			0				0
amortization of Class A Unit awards																						811,000	0	0	0	0	811,000	0
Syndication and offering costs	(11,429,000)			0			(11,429,000)			0			(11,429,000)			0				0
Stock Issued During Period, Value, Share-based Compensation, Gross	140,000			0			140,000			0			140,000			0				0
Dividends, Common Stock, Cash	(10,104,000)			0			(10,104,000)			0			(10,104,000)			0
Balance at Jun. 30, 2018	1,433,477,000			397,000			1,430,713,000			0			1,431,124,000			2,353,000				14,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(5,278,000)			0			0			(5,138,000)			(5,138,000)			(140,000)				0
non-controlling interest equity adjustment	0			0			746,000			0			746,000			(746,000)				0
Payments to Noncontrolling Interests	(274,000)			0			0			0			0			(274,000)				0
Dividends, Preferred Stock		(20,533,000)	$ (391,000)		0	0		(25,606,000)	$ (456,000)		5,073,000	$ 65,000		(20,533,000)	$ (391,000)		0	$ 0		0	0
Proceeds from Issuance of Preferred Stock and Preference Stock	252,592,000			0			252,589,000						252,592,000							3,000		29,609,000	0	29,609,000	0	29,609,000	0		0
Balance at Dec. 31, 2018	1,609,385,000			418,000			1,607,712,000			0			1,608,146,000			1,239,000				16,000
Stock Redeemed or Called During Period, Value	(5,111,000)			17,000			(5,128,000)			0			(5,111,000)			0
exercise of warrants	7,592,000			6,000			7,586,000			0			7,592,000			0				0
Stock Issued During Period, Value, Conversion of Units	0			1,000			564,000			0			565,000			(565,000)				0
amortization of Class A Unit awards																						301,000	0	0	0	0	301,000	0
Syndication and offering costs	(30,242,000)			0			(30,242,000)			0			(30,242,000)			0				0
Stock Issued During Period, Value, Share-based Compensation, Gross	316,000			0			316,000			0			316,000			0				0
Dividends, Common Stock, Cash	(22,776,000)			0			(22,776,000)			0			(22,776,000)			0
Balance at Jun. 30, 2019	1,784,170,000			442,000			1,784,197,000			0			1,784,658,000			(488,000)				19,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(3,957,000)			0			0			(3,878,000)			(3,878,000)			(79,000)				0
non-controlling interest equity adjustment	0			0			926,000			0			926,000			(926,000)				0
Payments to Noncontrolling Interests	(458,000)			0			0			0			0			(458,000)				0
Dividends, Preferred Stock		(51,240,000)	(1,841,000)		0	0		(54,984,000)	(1,975,000)		3,744,000	134,000		(51,240,000)	(1,841,000)		0	0		0	0
Proceeds from Issuance of Preferred Stock and Preference Stock	123,910,000			0			123,909,000						123,910,000							1,000		17,137,000	0	17,137,000	0	17,137,000	0		$ 0
Balance at Mar. 31, 2019	1,699,569,000			432,000			1,698,810,000			0			1,699,260,000			309,000				18,000
Stock Redeemed or Called During Period, Value	(3,106,000)			7,000			(3,113,000)			0			(3,106,000)			0
exercise of warrants	3,344,000			3,000			3,341,000			0			3,344,000			0				0
Stock Issued During Period, Value, Conversion of Units	0			0			38,000			0			38,000			(38,000)				0
amortization of Class A Unit awards																						$ 149,000	$ 0	$ 0	$ 0	$ 0	$ 149,000	$ 0
Syndication and offering costs	(15,961,000)			0			(15,961,000)			0			(15,961,000)			0				0
Stock Issued During Period, Value, Share-based Compensation, Gross	157,000			0			157,000			0			157,000			0				0
Dividends, Common Stock, Cash	(11,581,000)			0			(11,581,000)			0			(11,581,000)			0
Balance at Jun. 30, 2019	1,784,170,000			442,000			1,784,197,000			0			1,784,658,000			(488,000)				19,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(1,677,000)			0			0			(1,106,000)			(1,106,000)			(571,000)				0
non-controlling interest equity adjustment	0			0			108,000			0			108,000			(108,000)				0
Payments to Noncontrolling Interests	$ (229,000)			$ 0			$ 0			$ 0			$ 0			$ (229,000)				0
Dividends, Preferred Stock		$ (26,507,000)	$ (1,035,000)		$ 0	$ 0		$ (27,566,000)	$ (1,082,000)		$ 1,059,000	$ 47,000		$ (26,507,000)	$ (1,035,000)		$ 0	$ 0		$ 0	$ 0

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Statements of Equity and Accumulated Deficit Parenthetical - $ / shares	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Common Stock, Dividends, Per Share, Declared	$ 0.5225	$ 0.505
Series A Preferred Stock [Member]
Preferred Stock, Dividends Per Share, Declared	5.00	5.00
Minimum [Member] | Series M Preferred Stock [Member]
Preferred Stock, Dividends Per Share, Declared	4.79	4.79
Maximum [Member] | Series M Preferred Stock [Member]
Preferred Stock, Dividends Per Share, Declared	$ 6.25	$ 6.25

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Organization

6 Months Ended

Jun. 30, 2019

Organization [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Organization and Basis of Presentation

Preferred Apartment Communities, Inc. is a Maryland corporation formed primarily to own and operate multifamily properties and, to a lesser extent, own and operate student housing properties, grocery-anchored shopping centers and strategically located, well leased class A office buildings, all in select targeted markets throughout the United States.  As part of our business strategy, we may enter into forward purchase contracts or purchase options for to-be-built multifamily communities and we may make real estate related loans, provide deposit arrangements, or provide performance assurances, as may be necessary or appropriate, in connection with the development of multifamily communities.  As a secondary strategy, we may acquire or originate senior mortgage loans, subordinate loans or real estate loans secured by interests in multifamily properties, membership or partnership interests in multifamily properties and other multifamily related assets and invest a lesser portion of our assets in other real estate related investments, including other income-producing property types, senior mortgage loans, subordinate loans or real estate loans secured by interests in other income-producing property types, membership or partnership interests in other income-producing property types as determined by our manager as appropriate for us.  At December 31, 2018, the Company was the approximate 97.9% owner of Preferred Apartment Communities Operating Partnership, L.P., the Company's operating partnership. Preferred Apartment Communities, Inc. has elected to be taxed as a real estate investment trust under the Internal Revenue Code of 1986, as amended, commencing with its tax year ended December 31, 2011. The Company is externally managed and advised by Preferred Apartment Advisors, LLC, or its Manager, a Delaware limited liability company and related party (see Note 6).

As of June 30, 2019, the Company had 44,246,703 shares of common stock, par value $0.01 per share, or Common Stock, issued and outstanding and was the approximate 98.1% owner of the Operating Partnership at that date. The number of partnership units not owned by the Company totaled 874,937 at June 30, 2019 and represented Class A OP Units of the Operating Partnership, or Class A OP Units. The Class A OP Units are convertible at any time at the option of the holder into the Operating Partnership's choice of either cash or Common Stock. In the case of cash, the value is determined based upon the trailing 20-day volume weighted average price of the Company's Common Stock.

The Company controls the Operating Partnership through its sole general partner interest and conducts substantially all of its business through the Operating Partnership. The Company has determined the Operating Partnership is a variable interest entity, or VIE, of which the Company is the primary beneficiary. The Company is involved with other VIEs, such as through its investments in mortgage pools from the Freddie Mac K Program, as discussed in Note 4. New Market Properties, LLC owns and conducts the business of our portfolio of grocery-anchored shopping centers. Preferred Office Properties, LLC owns and conducts the business of our portfolio of office buildings. Preferred Campus Communities, LLC owns and conducts the business of our portfolio of off-campus student housing communities (see Note 16). Each of these entities are wholly-owned subsidiaries of the Operating Partnership.

Basis of Presentation

These consolidated financial statements include all of the accounts of the Company and the Operating Partnership presented in accordance with accounting principles generally accepted in the United States of America, or GAAP. The year end condensed balance sheet data was derived from audited financial statements, but does not contain all the disclosures required by GAAP. All significant intercompany transactions have been eliminated in consolidation. Certain adjustments have been made consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair presentation of the Company's financial condition and results of operations. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Amounts are presented in thousands where indicated.

As permitted by the practical expedient within ASC 842, Leases, the Company has elected to report the lease component and non-lease components as one single component within the line entitled Rental Revenues on the Company's Consolidated Statements of Operations. Reimbursement revenue was previously presented in the Company’s Other Property Revenues line item. For presentation purposes, the Company has reclassified its revenue from reimbursements from the Other Property Revenues line into the Rental Revenues line for all periods presented.

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Summary of Significant Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Summary of Significant Accounting Policies

Variable Interest Entities

A variable interest entity, or “VIE” is an entity that lacks sufficient equity to finance its activities without additional subordinated financial support from other parties, or whose equity holders lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary, which is defined as the party who has a controlling financial interest in the VIE through the (a) power to direct the activities of the VIE that most significantly affect the VIE’s economic performance, and (b) obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. The Company assesses whether it meets the power and benefits criteria and in performing this analysis, the Company considers both qualitative and quantitative factors, including the Company’s ability to control or significantly influence key decisions of the VIE and the obligation or likelihood for the Company to fund operating losses of the VIE. The determination of whether an entity is a VIE, and whether the Company is the primary beneficiary, may involve significant judgment, including the determination of which activities most significantly affect the entities’ performance, and estimates about the current and future fair values and performance of assets held by the VIE. If the Company determines that it meets both the power and benefits criteria of the VIE, the Company is deemed to be the primary beneficiary of the VIE and the Company consolidates the entire VIE entity in its consolidated financial statements. For those VIEs which arise from the Company's investment in mortgage-backed securities and which the Company consolidates, it elects the fair value option, under which the assets and liabilities of the consolidated VIE are carried at fair value. The periodic changes in fair value are included in the earnings of the Company and are reported on the line entitled Change in fair value of net assets of consolidated VIE from mortgage-backed pool on the Company's Consolidated Statements of Operations. See Note 4 for discussion related to the Company’s investments in subordinate tranches of collateralized mortgage-backed pools and Note 15 for fair value disclosures related to a consolidated VIE related to these investments.

Real Estate Loans

The Company carries its investments in real estate loans at amortized cost with assessments made for possible loan loss allowances in the event recoverability of the principal amount becomes doubtful. If, upon testing for possible loan loss allowances, the fair value result of the loan or its collateral is lower than the carrying amount of the loan, an allowance is recorded to lower the carrying amount to fair value, with a loss recorded in earnings. The balances of real estate loans presented on the consolidated balance sheets consist of drawn amounts on the loans, net of unamortized deferred loan origination fees and loan loss allowances.

Interest income on real estate loans and notes receivable is recognized on an accrual basis over the lives of the loans or notes. In the event that a loan or note is refinanced with the proceeds of another loan issued by the Company, any unamortized loan fee revenue from the first loan will be recognized as interest revenue at the date of refinancing. Loan origination fees applicable to real estate loans are amortized over the lives of the loans as adjustments to interest income using the effective interest rate method. The accrual of interest on all these instruments ceases when there is concern as to the ultimate collection of principal or interest. Certain real estate loan assets include limited purchase options and either exit fees or additional amounts of accrued interest. Exit fees or accrued interest due will be treated as additional consideration for the acquired project if the Company purchases the subject property. Additional accrued interest becomes due in cash to the Company on the earliest to occur of: (i) the maturity of the loan, (ii) any uncured event of default as defined in the associated loan agreement, (iii) the sale of the project or the refinancing of the loan (other than a refinancing loan by the Company or one of its affiliates) and (iv) any other repayment of the loan.

Evaluations for the possible need for loan loss allowances are performed for each real estate loan investment at least quarterly. Loan loss allowances are needed when it is deemed probable that all amounts due will not be collected according to the contractual terms of the loan. Depending upon the circumstances and significance of risk related to the collectability of the loan, management may determine that (i) the loan should be accounted for as a non-accrual loan because recovery of all contractual amounts due are deemed improbable and that any amounts subsequently received will be used to reduce the loan’s principal balance, (ii) in the event of a modification to the loan granted by the Company as a concession to the borrower who is experiencing financial difficulty, result in the need to apply troubled debt restructuring (“TDR”) accounting guidance, and/or (iii) an allowance for loan loss is required for the loan based upon the value of the underlying collateral and the Company’s evaluation of a possible shortfall with regards to the loan’s repayment based upon an estimated sales price, additional costs (if necessary), estimated selling costs, and amounts due to all lenders.

In connection with the surveillance review process, the Company’s real estate loan investments are assigned an internal risk rating. The internal risk ratings are based on the loan’s current status as compared to underwriting for certain metrics such as total expected construction cost if overruns are noted, construction completion timing if there are delays, current cap rates within the MSA, leasing status, rental rates, net operating income, expected free cash flow, and other factors management deems important related to the ultimate collectability of the loan. The final internal risk ratings are influenced by other quantitative and qualitative factors that can result in an adjustment to the ratings. Each loan is given an internal risk rating from “A” to “D”.  Loans rated an “A” meet all present contractual obligations and there are no indicators which would cause concern for the borrower’s ability to meet all present contractual obligations. Loans rated a “B” meet all present contractual obligations, but exhibited at least one indication of a negative variation from the underwriting for the loan and/or project. Loans rated a “C” exhibit some weakness that deserves management’s close attention and if uncorrected, may result in deterioration of repayment prospects. For these loans, management performs analyses to verify the borrower’s ability to meet all present contractual obligations, including obtaining an appraisal of the underlying collateral for the loan. Based on the available collateral to satisfy the Company’s outstanding principal and interest contractually due, we may provide for an allowance, move the loan to non-accrual status for future interest recognition or continue monitoring the loan. For loans rated a “D”, the collection of all contractual principal and interest is improbable and management has determined to account for the loan as a non-accrual loan and, if appropriate under the circumstances record a loan loss allowance.

The Company's real estate loan investments are collateralized by real estate development projects and secured further by guaranties of repayment from one or more of the borrowers. The Company's lines of credit receivable are typically only collateralized by personal guaranties, but occasionally may be cross-collateralized by interests in other real estate projects. As a result, the Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property, as well as the financial and operating capability of the borrower. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan, and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, the overall economic environment, real estate sector, and geographic sub‑market in which the borrower operates are considered. Such impairment analyses are completed and reviewed by management, utilizing various data sources, including periodic financial data such as property operating statements, occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, capitalization and discount rates and site inspections.

See the Revenue Recognition section of this Note for other loan-related policy disclosures required by ASC 310-10-50-6.

Purchase Option Terminations

The Company will occasionally receive a purchase option on the underlying property in conjunction with extending a real estate loan investment to the developer of the property. The purchase option is often at a discount to the to-be-agreed-upon market value of the property, once stabilized. If the Company elects not to exercise the purchase option and acquire the property, it may negotiate to sell the purchase option back to the developer and receive a termination fee in consideration. The amount of the termination fee is accounted for as additional interest on the real estate loan investment and is recognized as interest revenue utilizing the effective interest method over the period beginning from the date of election until the earlier of (i) the maturity of the real estate loan investment and (ii) the sale of the property.

Revenue Recognition

Multifamily communities and student housing properties

Rental revenue is recognized when earned from residents of the Company's multifamily communities, which is over the terms of the rental agreements, typically of 9 to 15 months’ duration. The Company evaluates the collectability of amounts due from residents and recognizes revenue from residents when collectability is deemed probable, in accordance with ASC 842-30-25-12. The Company disclosed bad debt expense within the Property Operating and Maintenance expense line item in prior periods, but recorded the reduction in revenue against Rental Revenues and Other Property Revenues, as applicable, for the current period.

The Company evaluated the various ancillary revenues within its multifamily leases, including resident utility reimbursements. Having met the criteria that (i) the timing and pattern of transfer for the lease component and associated non-lease components are the same and (ii) that the lease component, if accounted for separately would be classified as an operating lease, the Company has elected the practical expedient under Lease Accounting, ASC 842, paragraph 10-15-42A, to elect reporting the lease component and non-lease components as one single component under Rental Revenues recognized in accordance with ASC 842. Lease components such as pet rental fees and parking rental fees as well as non-lease components such as utility reimbursements were previously presented in the Company’s Other Property Revenues line item. For presentation purposes, the Company has reclassified its revenue from these revenue sources into Rental Revenues for all periods presented, for comparability. Revenue from utility reimbursements are considered variable lease payments and are recognized in the period in which the related expenses are incurred.

Grocery-anchored shopping centers and office properties

Our retail leases have original lease terms which generally range from three to seven years for spaces under 5,000 square feet and from 10 to 20 years for spaces over 10,000 square feet. Anchor leases generally contain renewal options for one or more additional periods whereas in-line tenant leases may or may not have renewal options. With the exception of anchor leases, the leases generally contain contractual increases in base rent rates over the lease term and the base rent rates for renewal periods are generally based upon the rental rate for the primary term, which may be adjusted for inflation or market conditions. Anchor leases generally do not contain contractual increases in base rent rates over the lease term and the renewal periods. Our leases generally provide for the payment of fixed monthly rentals and may also provide for the payment of additional rent based upon a percentage of the tenant’s gross sales above a certain threshold level (“percentage rent”). Our leases also generally include tenant reimbursements for common area expenses, insurance, and real estate taxes. Utilities are generally paid by tenants either directly through separate meters or through payment of tenant reimbursements. The foregoing general description of the characteristics of the leases in our centers is not intended to describe all leases and material variations in lease terms may exist.

Our office building leases have original lease terms which generally range from 5 to 15 years and generally contain contractual, annual base rental rate escalations ranging from 2% to 3%. These leases may be structured as gross where the tenant’s base rental rate is all inclusive and there is no additional obligation to reimburse building operating expenses, net or NNN where in addition to base rent the tenant is also responsible for its pro rata share of reimbursable building operating expenses, or modified gross where in addition to base rent the tenant is also responsible for its pro rata share of reimbursable building operating expense increases over a base year amount (typically calculated as the actual reimbursable operating expenses in year one of the original lease term).

Base rental revenue from tenants' operating leases is a lease component revenue in the Company's grocery-anchored shopping centers and office properties and is recognized on a straight-line basis over the term of the lease. Revenue based on "percentage rent" provisions that provide for additional rents that become due upon achievement of specified sales revenue targets (as specified in each lease agreement) is recognized only after the tenant exceeds its specified sales revenue target. Revenue from reimbursements of the tenants' share of real estate taxes, insurance and common area maintenance, or CAM, costs represent non-lease component revenue. Having met the criteria that (i) the timing and pattern of transfer for the lease component and associated non-lease components are the same and (ii) that the lease component, if accounted for separately would be classified as an operating lease, the Company has elected the practical expedient under ASC 842, Leases, paragraph 10-15-42A, to elect reporting the lease component and non-lease components as one single component under Rental Revenues recognized in accordance with ASC 842. Reimbursement revenue and percentage rent were previously presented in the Company’s Other Property Revenues line item. For presentation purposes, the Company has reclassified its revenue from reimbursements into Rental Revenues for all periods presented, for comparability. Revenue from reimbursements are considered variable lease payments and are recognized in the period in which the related expenses are incurred. The Company does not record income and offsetting expense for certain variable costs paid directly to third parties by lessees on behalf of lessors.

Non-lease components which do not qualify under the practical expedient primarily include percentage rent, lease termination income and other ancillary revenue (e.g. storage revenue, license fees, late fees, tenant billbacks). These items are recorded under Other property revenues. Lease termination revenues are recognized ratably over the revised remaining lease term after giving effect to the termination notice or when tenant vacates and the Company has no further obligations under the lease. Rents and tenant reimbursements collected in advance are recorded as prepaid rent within other liabilities in the accompanying consolidated balance sheets. The Company evaluated the collectability of the tenant receivable related to rental and reimbursement billings due from tenants and straight-line rent receivables, which represent the cumulative amount of future adjustments necessary to present rental revenue on a straight-line basis, by taking into consideration the Company's historical write-off experience, tenant credit-worthiness, current economic trends, and remaining lease terms. The Company evaluates the collectability of these amounts and recognizes revenue related to tenants where collectability is deemed probable, in accordance with ASC 842-30-25-12. The Company previously recorded bad debt expense within the Property operating and maintenance expense line item, and upon adoption of ASC 842 on January 1, 2019, began recording amounts not deemed probable of collection as a reduction of rental revenues and other property revenues, as applicable.

The Company may provide grocery-anchored shopping center and office building tenants an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and depreciated over the shorter of the useful life of the improvements or the remaining lease term. If the allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of rental revenue. Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease. When the Company is the owner of the leasehold improvements, recognition of rental revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date is the date the tenant obtains possession of the leased space for purposes of constructing its leasehold improvements. For our office properties, if the improvement is deemed to be a “landlord asset,” and the tenant funded the tenant improvements, the cost is amortized over the term of the underlying lease with a corresponding recognition of rental revenues. In order to qualify as a landlord asset, the specifics of the tenant’s assets are reviewed, including the Company's approval of the tenant’s detailed expenditures, whether such assets may be usable by other future tenants, whether the Company has consent to alter or remove the assets from the premises and generally remain the Company's property at the end of the lease.

Gains on sales of real estate assets

The Company recognizes gains on sales of real estate based on the difference between the consideration received and the carrying amount of the distinct asset, including the carrying amount of any liabilities relieved or assumed by the purchasing counterparty and net of disposition expenses.

Lessee accounting

The Company has evaluated its leases for which it is the lessee to determine the value of any right of use assets and related lease liabilities. The Company has three ground leases related to our office and grocery-anchored shopping center assets, one of which had been recorded at fair value on the Company's balance sheet at acquisition due to a purchase option the Company deemed probable of exercising. These ground leases generally have extended terms (e.g. over 20 years with multiple renewal options) and generally have base rent with CPI-based increases. The Company evaluated its renewal option periods in quantifying its asset and liability related to these ground leases. In determining the value of its right of use asset and lease liability, the Company used discount rates comparable to recent loan rates obtained on comparative properties within its portfolio. The Company’s right of use asset and related lease liability in accordance with ASC 842-20-30 related to these ground leases are recorded within the Tenant Receivables and Other Assets and the Security Deposits and Other Liabilities line items of the balance sheet, respectively. The Company is also the lessee of furniture and equipment leases such as office equipment, which generally are three to five years with minimal rent increases. The Company determined that the related right of use asset and lease liability for its furniture and equipment leases were immaterial.

New Accounting Pronouncements

Standard	Description	Date of Adoption	Effect on the Consolidated Financial Statements
Recently Adopted Accounting Guidance
ASU 2016-02, Leases (Topic 842) ASU 2018-11, Leases (Topic 842) Targeted Improvements	ASU 2016-02 requires a lessor to separate lease components from non-lease components, such as maintenance services or other activities that transfer a good or service to our residents and tenants in a contract. In July 2018, the FASB issued ASU 2018-11 which allowed for a practical expedient for lessors to elect, by class of underlying assets, to not separate lease and non-lease components if both (1) the timing and pattern of revenue recognition are the same for the non-lease component(s) and related lease component and (2) the combined single lease component would be classified as an operating lease. Additional practical expedients were also provided for under ASU 2018-11 related to expired or existing leases.	January 1, 2019	Having met the criteria that (i) the timing and pattern of transfer for the lease component and associated non-lease components are the same and (ii) that the lease component, if accounted for separately would be classified as an operating lease, the Company has elected the practical expedient within ASU 2018-11, as codified under ASC 842-10-15-42A, to elect reporting the lease component and non-lease components as one single component under Rental Revenues recognized in accordance with ASC 842. This change had no material effect on the timing of revenue recognition. The Company has also elected to implement the package of practical expedients provided within ASU 2018-11, as codified under ASC 842-10-65-1(f), which allows the Company not to reassess whether expired or existing contracts contain leases, its lease classification, and any related initial direct costs.
ASU 2018-20, Leases (ASC 842), Narrow-Scope Improvements for Lessors	ASU 2018-20 eliminates the requirement to record income and offsetting expense for certain variable costs paid for by lessees on behalf of lessors.	January 1, 2019	The Company no longer records income and expense for property taxes paid directly to the taxing authority by a lessee based on this standard. The effect is a reduction of other property revenues and of property tax expense, with no effect upon net income/loss.
Recently Issued Accounting Guidance Not Yet Adopted
ASU 2016-13, Financial Instruments - Credit Losses (ASC 326)	ASU 2016-03 changes how entities will measure credit losses for most financial assets, including loans, which are not measured at fair value through net income. The guidance replaces the existing incurred loss model with an expected loss model for instruments measured at amortized cost, and require entities to record credit allowances for financial assets rather than reduce the carrying amount, as they do today under the other-than temporary impairment model.	January 1, 2020	We are currently evaluating the potential impacts of the new guidance and proposed amendments to the new guidance on our consolidated financial statements. The new guidance specifically excludes financial assets measured at fair value through net income. The Company elected the fair value option for its Freddie Mac K Program investments. Therefore, we expect the impact of the new guidance on accounting for financial assets will be limited to our real estate investment loans and notes and revolving lines of credit. We expect to implement this new guidance using the modified retrospective basis by recording a cumulative effect adjustment to retained earnings on January 1, 2020.

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Real Estate Assets (Notes)

6 Months Ended

Jun. 30, 2019

Real Estate Assets [Abstract]

Business Combination Disclosure

Real Estate Assets

The Company's real estate assets consisted of:

	As of:
	June 30, 2019	December 31, 2018
Multifamily communities:
Properties (1)	32	32
Units	9,768	9,768
New Market Properties: (2)
Properties	49	45
Gross leasable area (square feet) (3)	5,412,328	4,730,695
Student housing properties:
Properties	8	7
Units	2,011	1,679
Beds	6,095	5,208
Preferred Office Properties:
Properties	7	7
Rentable square feet	2,578,000	2,578,000
(1) The acquired second phases of CityPark View and Crosstown Walk communities are managed in combination with the initial phases and so together are considered a single property, as are the Lenox Village and Regent at Lenox Village assets within the Lenox Portfolio.
(2) See Note 13, Segment information.
(3) The Company also owns approximately 47,600 square feet of gross leasable area of ground floor retail space which is embedded within the Lenox Portfolio and is not included in the totals above for New Market Properties.

Multifamily communities sold

The Company had no sales of multifamily community assets during the six-month period ended June 30, 2019.

On March 20, 2018, the Company closed on the sale of its 328-unit multifamily community in Raleigh, North Carolina, or Lake Cameron, to an unrelated third party for a purchase price of approximately $43.5 million, exclusive of closing costs, and debt defeasance-related costs and resulted in a gain of $20.4 million. Lake Cameron contributed approximately $0.2 million of net income to the consolidated operating results of the Company for the six-month period ended June 30, 2018.

The carrying amounts of the significant assets and liabilities of the disposed property at the date of sale were:

	Lake Cameron
(in thousands)	June 30, 2018
Real estate assets:
Land	$	4,000
Building and improvements	21,519
Furniture, fixtures and equipment	3,687
Accumulated depreciation	(7,220		)
Total assets	$	21,986
Liabilities:
Mortgage note payable	$	19,736
Supplemental mortgage note	—
Total liabilities	$	19,736

Multifamily communities acquired

The Company had no acquisitions of multifamily community assets during the six-month period ended June 30, 2019.

During the six-month period ended June 30, 2018, the Company completed the acquisition of the following multifamily communities:

Acquisition date	Property	Location	Units
1/9/2018	The Lux at Sorrel	Jacksonville, Florida	265
2/28/2018	Green Park	Atlanta, Georgia	310
			575

The aggregate purchase prices of the multifamily acquisitions for the six-month period ended June 30, 2018 were approximately $106.5 million, exclusive of acquired escrows, security deposits, prepaids, capitalized acquisition costs and other miscellaneous assets and assumed liabilities.

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Real Estate Loans, Notes Receivable, and Lines of Credit

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Real Estate Loans, Notes Receivable, and Line of Credit

he Company's Palisades real estate loan investment was subject to a loan participation agreement with an unaffiliated third party, under which the syndicate was to fund approximately 25% of the loan commitment amount and collectively receive approximately 25% of interest payments, returns of principal and purchase option discount (if applicable). On March 13, 2019, the Company repurchased the loan participant's 25% balance in the loan from the loan participant and at June 30, 2019, carried the entire loan balance on its consolidated balance sheet without reflection of any liability to any third party.

The Company's real estate loan investments are collateralized by 100% of the membership interests of the underlying project entity, and, where considered necessary, by unconditional joint and several repayment guaranties and performance guaranties by the principal(s) of the borrowers. These guaranties generally remain in effect until the receipt of a final certificate of occupancy. All of the guaranties are subject to the rights held by the senior lender pursuant to a standard intercreditor agreement. Prepayment of the real estate loans are permitted in whole, but not in part, without the Company's consent.

Management monitors the credit quality of the obligors under each of the Company's real estate loans by tracking the timeliness of scheduled interest and principal payments relative to the due dates as specified in the loan documents, as well as draw requests on the loans relative to the project budgets. In addition, management monitors the actual progress of development and construction relative to the construction plan, as well as local, regional and national economic conditions that may bear on our current and target markets. The credit quality of the Company’s borrowers is primarily based on their payment history on an individual loan basis, and the Company assigns risk ratings to its real estate loans and notes receivable in credit quality categories as described in Note 2.

The Company continues to monitor each loan and note receivable for potential deterioration of risk ratings and can make no assurances that economic or industry conditions or other circumstances     will not lead to future loan loss allowances.

At June 30, 2019, the Company's portfolio of real estate loan investments by credit quality indicator was:

(In thousands)
Rating indicator	Principal balance		Accrued interest		Receivables for purchase option terminations		Total
A	$	317,619	$	20,688	$	7,900	$	346,207
B	38,310		2,510		—		40,820
C	6,116		1,208		—		7,324
D	—		—		—		—
	$	362,045	$	24,406	$	7,900	$	394,351

At June 30, 2019, our portfolio of notes and lines of credit receivable consisted of:

Borrower	Date of loan	Maturity date	Total loan commitments		Outstanding balance as of:						Interest rate
					June 30, 2019			December 31, 2018
(Dollars in thousands)
Preferred Capital Marketing Services, LLC (1)	1/24/2013	12/31/2019	$	1,500	$	686		$	763		10	%
Preferred Apartment Advisors, LLC (1,2)	8/21/2012	12/31/2019	22,000		16,842			9,778			7.5	%	(3)
Haven Campus Communities, LLC (1,4)	6/11/2014	12/31/2018	11,660		8,374			11,620			8	%
Oxford Capital Partners, LLC (5)	10/5/2015	6/30/2020	8,000		6,589			4,022			12	%
Newport Development Partners, LLC	6/17/2014	6/30/2020	2,000		1,529			—			12	%
Mulberry Development Group, LLC (6)	3/31/2016	6/30/2020	750		455			465			12	%
360 Capital Company, LLC (6)	5/24/2016	12/31/2019	3,400		3,292			3,100			12	%
360 Capital Company, LLC (1,7)	7/24/2018	12/31/2020	8,000		7,426			6,923			8.5	%
Haven Campus Communities Charlotte Member, LLC (1)	8/31/2018	N/A	—		—			10,788			15	%
Unamortized loan fees					(51		)	(152		)
			$	57,310	$	45,142		$	47,307
(1) See related party disclosure in Note 6.
(2) The amounts payable under this revolving credit line were collateralized by an assignment of the Manager's rights to fees due under the Sixth Amended and Restated Management Agreement between the Company and the Manager, or the Management Agreement.
(3) Effective January 1, 2019, the interest rate was increased from 6.0% per annum to 7.5% per annum and the maturity date was extended to December 31, 2019.
(4) The amount payable under this note is collateralized by one of the principals of the borrower's 49.49% interest in an unrelated shopping center located in Atlanta, Georgia and a personal guaranty of repayment by the principals of the borrower.
(5) The amounts payable under the terms of this revolving credit line, up to the lesser of 25% of the loan balance or $2.0 million, are collateralized by a personal guaranty of repayment by the principals of the borrower.
(6) The amounts payable under the terms of these revolving credit lines are collateralized by a personal guaranty of repayment by the principals of the borrower.
(7) The amount payable under the note is collateralized by the developer's interest in the Fort Myers multifamily community project and a personal guaranty of repayment by the principals of the borrower.

On March 27, 2019, the Company entered into a negotiated agreement with the borrowers of the Haven Campus Communities, LLC and Haven Campus Communities Charlotte Member, LLC lines of credit, both of which were in default as of December 31, 2018. The Company received the membership interests of the Haven49 project in exchange for complete settlement of the Haven Campus Communities Charlotte Member, LLC line of credit and the Haven49 mezzanine and member loans. As part of the agreement, payments and credits totaling approximately $3.3 million were applied against the outstanding balance of the Haven Campus Communities, LLC line of credit. The Company retains a pledge of a 49.49% interest in an unrelated shopping center located in Atlanta, Georgia as additional collateral on the Haven Campus Communities, LLC line of credit.

The Company recorded interest income and other revenue from these instruments as follows:

Interest income	Three months ended June 30,				Six months ended June 30,
(in thousands)	2019		2018		2019		2018
Real estate loans:
Current interest payments	$	7,479	$	8,686	$	14,948	$	17,191
Additional accrued interest	3,184		5,469		6,569		10,195
Origination fee amortization	465		607		780		1,038
Purchase option termination fee amortization	1,383		2,470		5,617		2,470
Total real estate loan revenue	12,511		17,232		27,914		30,894
Interest income on notes and lines of credit	925		800		2,414		1,703
Interest income from money market accounts	280		—		280		—
Interest income from agency mortgage-backed securities	9		—		207		—
Interest income on loans and notes receivable	$	13,725	$	18,032	$	30,815	$	32,597

The Company extends loans for purposes such as to partially finance the development of multifamily residential communities, to acquire land in anticipation of developing and constructing multifamily residential communities, and for other real estate or real estate related projects. Certain of these loans include characteristics such as exclusive options to purchase the project within a specific time window following project completion and stabilization, the sufficiency of the borrowers' investment at risk and the existence of payment and performance guaranties provided by the borrowers, any of which can cause the loans to create variable interests to the Company and require further evaluation as to whether the variable interest creates a VIE, which would necessitate consolidation of the project.

The Company considers the facts and circumstances pertinent to each entity borrowing under the loan, including the relative amount of financing the Company is contributing to the overall project cost, decision making rights or control held by the Company, guarantees provided by third parties, and rights to expected residual gains or obligations to absorb expected residual losses that could be significant from the project. If the Company is deemed to be the primary beneficiary of a VIE, consolidation treatment would be required.

The Company has no decision making authority or power to direct activity, except normal lender rights, which are subordinate to the senior loans on the projects. The Company has concluded that it is not the primary beneficiary of the borrowing entities and therefore it has not consolidated these entities in its consolidated financial statements. The Company's maximum exposure to loss from these loans is their drawn amount as of June 30, 2019 of approximately $362.0 million. The maximum aggregate amount of loans to be funded as of June 30, 2019 was approximately $443.1 million, which includes approximately $81.0 million of loan committed amounts not yet funded.

The Company has evaluated its real estate loans, where appropriate, for accounting treatment as loans versus real estate development projects, as required by ASC 310. For each loan, the characteristics and the facts and circumstances indicate that loan accounting treatment is appropriate.

The Company is also subject to a geographic concentration of risk that could be considered significant with regard to the 464 Bishop, Dawsonville Marketplace, Falls at Forsyth, Newbergh, Newbergh Capital, Solis Kennesaw, Solis Kennesaw Capital, Solis Kennesaw II, and 8West, all of which are partially supporting various real estate projects in or near Atlanta, Georgia. The drawn amount of these loans as of June 30, 2019 totaled approximately $97.9 million (with a total commitment amount of approximately $119.4 million) and in the event of a total failure to perform by the borrowers and guarantors, would subject the Company to a total possible loss of the drawn amount.

Freddie Mac K Program investments

On May 23, 2018, the Company purchased a subordinate tranche of Series 2018-ML04, a pool of 20 multifamily mortgages with a total pool size of approximately $276.3 million, from Freddie Mac. The purchase price of the subordinate tranche was approximately $4.7 million and has a weighted average maturity of approximately 16 years, at which time the Company will collect the face value of its tranche of $27.6 million. The yield to maturity of the subordinate tranche is expected to be approximately 11.5% per annum.

On March 28, 2019, the Company purchased a subordinate tranche of Series 2019-ML05, a pool of 21 multifamily mortgages with a total pool size of approximately $295.7 million, from Freddie Mac. The Company's tranche of the 2019-ML05 pool pays monthly interest of approximately $103,000. The purchase price of the subordinate tranche was approximately $18.4 million and has a weighted average maturity of approximately 16.1 years, at which time the Company will collect the face value of its tranche of $29.6 million. The yield to maturity of the subordinate tranche is expected to be approximately 8.9% per annum.

The Company has evaluated the structure of the investments under the VIE rules and has determined that, due to the Company's position as directing certificate holder of the two mortgage pools, it is in the position most able to influence the financial performance of the trusts. As the subordinate tranche holder, the Company also holds the first loss position of the mortgage pools. As such, the Company is deemed to be the primary beneficiary of the VIEs and has consolidated the assets, liabilities, revenues, expenses and cash flows of both trusts in its consolidated financial statements as of and for the three-month period ended June 30, 2019. The Company's maximum exposure to loss from the combined mortgage pools from the Freddie Mac K program is approximately $24.1 million. The Company has no recourse liability to either the creditors or other beneficial interest holders of either investment.

Agency Mortgage-Backed Securities investments

In December 2018, the Company began investing in Agency Mortgage-Backed Securities representing undivided (or “pass-through”) beneficial interests in specified pools of fixed-rate mortgage loans. The investments are classified as trading securities. On December 20, 2018, the Company sold its entire position of a pool with associated premium amounts totaling $41.1 million. At December 31, 2018, the Company held a receivable related to this sale transaction of $41.2 million, which was collected upon the settlement of the transaction in January 2019. Additionally, for the six-months ended June 30, 2019, the Company recorded approximately $207,000 in interest income related to these investments.

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Redeemable Preferred Stock

6 Months Ended

Jun. 30, 2019

Redeemable Stock, Preferred [Abstract]

Preferred Stock [Text Block]

Redeemable Preferred Stock and Equity Offerings

At June 30, 2019, the Company's active equity offerings consisted of:

• an offering of a maximum of 1,500,000 Units, with each Unit consisting of one share of Series A Redeemable Preferred Stock and one Warrant to purchase up to 20 shares of Common Stock (the "$1.5 Billion Unit Offering");

• an offering of up to a maximum of 500,000 shares of Series M Redeemable Preferred Stock (“mShares”), par value $0.01 per share (the “mShares Offering”); and

• an offering of up to $400 million of equity or debt securities (the "2019 Shelf Offering"), including an offering of up to $125 million of Common Stock from time to time in an "at the market" offering (the "2019 ATM Offering").

Certain offering costs are not related to specific closing transactions and are recognized as a reduction of stockholders' equity in the proportion of the number of instruments issued to the maximum number of Units anticipated to be issued. Any offering costs not yet reclassified as reductions of stockholders' equity are are reflected in the asset section of the consolidated balance sheets as deferred offering costs.

As of June 30, 2019, cumulative gross proceeds and offering costs for our active equity offerings consisted of:

(In thousands)							Deferred Offering Costs
Offering	Total offering				Gross proceeds as of June 30, 2019		Reclassified as reductions of stockholders' equity				Recorded as deferred assets		Total		Specifically identifiable offering costs (1)		Total offering costs
$1.5 Billion Unit Offering	$	1,500,000			$	939,340	$	6,014	75	%	$	1,989	$	8,003	$	88,498	$	96,501
mShares Offering	500,000				73,835		2,782		74	%	985		3,767		2,909		6,676
2016 Shelf Offering	300,000		(3	)	98,080		2,062		100	%	—		2,062		3,001		5,063
2019 Shelf Offering	400,000		(2	)	—		—		—	%	710		710		—		710
Total	$	2,700,000			$	1,111,255	$	10,858			$	3,684	$	14,542	$	94,408	$	108,950

⁽¹⁾ These offering costs specifically identifiable to Unit offering closing transactions, such as commissions, dealer manager fees, and other registration fees, are reflected as a reduction of stockholders' equity at the time of closing.

⁽²⁾ On April 25, 2019, the Company's 2019 Shelf Registration Statement was declared effective.

⁽³⁾ The $300 million 2016 Shelf Offering expired in second quarter 2019, and therefore all remaining deferred offering costs were reclassified as reductions of stockholder's equity.

Aggregate offering expenses of the $1.5 Billion Unit Offering, including selling commissions and dealer manager fees, and of the mShares Offering, including dealer manager fees, are each individually capped at 11.5% of the aggregate gross proceeds of the two offerings, of which the Company will reimburse its Manager up to 1.5% of the gross proceeds of such offerings for all organization and offering expenses incurred, excluding selling commissions and dealer manager fees for the $1.5 Billion Unit Offering and excluding dealer manager fees for the mShares Offering; however, upon approval by the conflicts committee of the board of directors, the Company may reimburse its Manager for any such expenses incurred above the 1.5% amount as permitted by the Financial Industry Regulatory Authority, or FINRA.

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Related Party Transactions

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Related Party Transactions

On April 16, 2018, John A. Williams, the Company's Chief Executive Officer and Chairman of the Board, passed away. The Company's Haven 12 real estate loan investment and Haven Campus Communities LLC line of credit are both supported in part by a guaranty of repayment and performance by John A. Williams, Jr., John A. Williams' son. Because the terms of these loans were negotiated and agreed upon while John A. Williams was the Chief Executive Officer of the Company, these instruments will continue to be reported as related party transactions until the loans are repaid. The Company named Daniel M. DuPree as Chairman of the Board of Directors and Chief Executive Officer of the Company. Leonard A. Silverstein was named Vice Chairman of the Board of Directors and continues as the Company's President and Chief Operating Officer.

On March 27, 2019, the Company's Haven49 and Haven49 Member real estate loan investments and the Haven Campus Communities Charlotte Member LLC line of credit were deemed satisfied in full in connection with the Company's acceptance of the borrowers' membership interests in the underlying Haven49 project.

Mr. Silverstein is an executive officer and Messrs. DuPree and Silverstein are also directors of NELL Partners, Inc., which controls the Manager. Mr. DuPree is the Chief Executive Officer and Mr. Silverstein is the President and Chief Operating Officer of the Manager.

The Company's Wiregrass and Wiregrass Capital real estate loan investments are partially financing the development of a multifamily community in Tampa, Florida by the Altman Companies. Timothy A. Peterson is a member of management of the Altman Companies as well as Chairman of the Audit Committee of the Company's Board of Directors. The Wiregrass loans therefore qualify as related party transactions.

The Management Agreement entitles the Manager to receive compensation for various services it performs related to acquiring assets and managing properties on the Company's behalf:

(In thousands)		Three-month periods ended June 30,				Six-month periods ended June 30,
Type of Compensation	Basis of Compensation	2019		2018		2019		2018
Acquisition fees	1.0% of the gross purchase price of real estate assets	$	1,203	$	2,861	$	2,603	$	4,620
Loan origination fees	1.0% of the maximum commitment of any real estate loan, note or line of credit receivable	125		411		526		1,211
Loan coordination fees	0.6% of any assumed, new or supplemental debt incurred in connection with an acquired property	621		814		965		1,554
Asset management fees	Monthly fee equal to one-twelfth of 0.50% of the total book value of assets, as adjusted	3,840		3,600		7,565		7,265
Property management fees	Monthly fee up to 4% of the monthly gross revenues of the properties managed	2,495		2,148		4,951		4,241
General and administrative expense fees	Monthly fee equal to 2% of the monthly gross revenues of the Company	1,581		1,535		3,067		2,968
Construction management fees	Quarterly fee for property renovation and takeover projects	78		142		136		273
Disposition fees	1% of the sale price of a real estate asset	16		—		16		435
		$	9,959	$	11,511	$	19,829	$	22,567

The Manager may, in its discretion, waive some or all of the asset management, property management, or general and administrative fees in the current period for properties owned by the Company. The waived fees may become earned by the Manager as an additional disposition fee only in the event of a sales transaction, and whereby the Company’s capital contributions for the property being sold exceed a 7% annual rate of return. The Company will recognize in future periods to the extent, if any, it determines that the sales transaction is probable, and that the estimated net sale proceeds would exceed the annual rate of return hurdle. A cumulative total of approximately $18.1 million of combined asset management and general and administrative fees related to acquired properties as of June 30, 2019 have been waived by the Manager. A total of $16.6 million remaining waived fees could possibly be earned by the Manager in the future.

In addition to property management fees, the Company incurred the following reimbursable on-site personnel salary and related benefits expenses at the properties, which are listed on the Consolidated Statements of Operations:

(in thousands)
Three-month periods ended June 30,				Six-month periods ended June 30,
2019		2018		2019		2018
$	4,213	$	3,930	$	8,292	$	7,539

The Manager utilizes its own and its affiliates' personnel to accomplish certain tasks related to raising capital that would typically be performed by third parties, including, but not limited to, legal and marketing functions. As permitted under the Management Agreement, the Manager was reimbursed $256,162 and $238,538 for the six-month periods ended June 30, 2019 and 2018, respectively and Preferred Capital Securities, LLC, or PCS, was reimbursed $680,116 and $727,601 for the six-month periods ended June 30, 2019 and 2018 , respectively. These costs are recorded as deferred offering costs until such time as additional closings occur on the $1.5 Billion Unit Offering, mShares Offering or the 2019 Shelf Offering, at which time they are reclassified on a pro-rata basis as a reduction of offering proceeds within stockholders’ equity.

The Company pays its Manager leasing commission fees for office and retail leases based on varying rates and conditions. These fees totaled $30,000 and $0 for the three-month periods ended June 30, 2019 and 2018 respectively and $53,000 and $9,000 for the six-month periods ended June 30, 2019 and 2018 respectively.

The Company holds a promissory note in the amount of approximately $686,000 due from Preferred Capital Marketing Services, LLC, or PCMS, which is a wholly-owned subsidiary of NELL Partners.

The Company has extended a revolving line of credit with a maximum borrowing amount of $22.0 million to its Manager.

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Dividends

6 Months Ended

Jun. 30, 2019

Dividends [Abstract]

dividends and distributions [Text Block]

Dividends and Distributions

The Company declares and pays monthly cash dividend distributions on its Series A Preferred Stock in the amount of $5.00 per share per month and beginning in March 2017, on its Series M Preferred Stock, on an escalating scale of $4.79 per month in year one, increasing to $6.25 per month in year eight and beyond. All preferred stock dividends are prorated for partial months at issuance as necessary. The Company declared aggregate quarterly cash dividends on its Common Stock of $0.5225 and $0.505 per share for the six-month periods ended June 30, 2019 and 2018, respectively. The holders of Class A OP Units of the Operating Partnership are entitled to equivalent distributions as the dividends declared on the Common Stock. At June 30, 2019, the Company had 874,937 Class A OP Units outstanding, which are exchangeable on a one-for-one basis for shares of Common Stock or the equivalent amount of cash.

The Company's dividend and distribution activity consisted of:

	Dividends and distributions declared
	For the six months ended June 30,
	2019		2018
(in thousands)
Series A Preferred Stock	$	51,240	$	39,737
mShares	1,841		704
Common Stock	22,776		19,906
Class A OP Units	458		540
Total	$	76,315	$	60,887

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Equity Compensation

6 Months Ended

Jun. 30, 2019

Equity Compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Equity Compensation

Stock Incentive Plan

On May 2, 2019, the Company’s board of directors adopted, and the Company’s stockholders approved, the Preferred Apartment Communities, Inc. 2019 Stock Incentive Plan, or the 2019 Plan, to incentivize, compensate and retain eligible officers, consultants, and non-employee directors. The 2019 Plan increased the aggregate number of shares of Common Stock authorized for issuance under the 2011 Plan from 2,617,500 to 3,617,500. The 2019 Plan does not have a stated expiration date.

Equity compensation expense by award type for the Company was:

	Three-month period ended June 30,				Six-month period ended June 30,				Unamortized expense as of June 30,
(in thousands)	2019		2018		2019		2018		2019
Class B Unit awards:
2016	$	—	$	74	$	2	148		$	—
2017	78		88		156		195		159
2018	71		648		143		1,464		430
Restricted stock grants:
2017	—		30		—		120		—
2018	30		60		120		60		—
2019	70		—		70		—		350
Restricted stock units:
2017	20		22		38		43		36
2018	21		28		40		55		139
2019	16		—		48		—		238
Total	$	306	$	950	$	617	$	2,085	$	1,352

Restricted Stock Grants

The following annual grants of restricted stock were made to members of the Company's independent directors, as payment of the annual retainer fees. The restricted stock grants vested (or are scheduled to vest) on a pro-rata basis over the four consecutive 90-day periods following the date of grant.

Service year	Shares	Fair value per share		Total compensation cost (in thousands)
2017	24,408	$	14.75	$	360
2018	24,810	$	14.51	$	360
2019	26,446	$	15.88	$	420

Class B OP Units

As of June 30, 2019, cumulative activity of grants of Class B Units of the Operating Partnership, or Class B OP units, was:

	Grant date
	1/2/2018		1/3/2017
Units granted	256,087		286,392
Units forfeited:
John A. Williams (1)	(38,284	)	—
Voluntary forfeiture by senior executives	(128,258	)	—
Other	(22,722	)	(5,334	)
Total forfeitures	(189,264	)	(5,334	)
Units earned and converted into Class A Units	—		(254,730	)
Class B Units outstanding at June 30, 2019	66,823		26,328
Units unearned but vested	32,575		—
Units unearned and not yet vested	34,248		26,328
Class B Units outstanding at June 30, 2019	66,823		26,328
(1) Pro rata modification of award on April 16, 2018, the date of Mr. Williams' passing.

There were no grants of Class B OP Units for 2019.

The underlying valuation assumptions and results for the 2018 Class B OP Unit awards were:

Grant dates	1/2/2018
Stock price	$	20.19
Dividend yield	4.95		%
Expected volatility	25.70		%
Risk-free interest rate	2.71		%
Number of Units granted:
One year vesting period	171,988
Three year vesting period	84,099
	256,087
Calculated fair value per Unit	$	16.66
Total fair value of Units	$	4,266,409
Target market threshold increase	$	5,660,580

The expected dividend yield assumptions were derived from the Company’s closing prices of the Common Stock on the grant dates and the projected future quarterly dividend payments per share of $0.25 for the 2018 awards.

For the 2018 awards, the Company's own stock price history was utilized as the basis for deriving the expected volatility assumption.

The risk-free rate assumptions were obtained from the Federal Reserve yield table and were calculated as the interpolated rate between the 20 and 30 year yield percentages on U. S. Treasury securities on the grant date.

Since the Class B OP Units have no expiration date, a derived service period of one year was utilized, which equals the period of time from the grant date to the initial valuation date.

Restricted Stock Units

The Company, through its Operating Partnership, has granted restricted stock units, or RSUs, to certain employees of affiliates of the Company, as shown in the following table:

Grant date	1/2/2019			1/2/2018			1/3/2017
Service period	2019-2021			2018-2020			2017-2019
RSU activity:
Granted	27,760			20,720			26,900
Forfeited	(1,280		)	(3,920		)	(6,674		)
Units earned and converted into common stock	—			—			(14,154		)
RSUs outstanding at June 30, 2019	26,480			16,800			6,072
RSUs unearned but vested	—			5,627			—
RSUs unearned but not yet vested	26,480			11,173			6,072
RSUs outstanding at June 30, 2019	26,480			16,800			6,072
Fair value per RSU	$	10.77		$	16.66		$	11.92
Total fair value of RSU grant	$	298,975		$	345,195		$	320,648

The RSUs vest in three equal consecutive one-year tranches from the date of grant. For each grant, on the Initial Valuation Date, the market capitalization of the number of shares of Common Stock at the date of grant is compared to the market capitalization of the same number of shares of Common Stock at the Initial Valuation Date. If the market capitalization measure results in an increase which exceeds the target market threshold, the Vested RSUs become earned RSUs and automatically convert into Common Stock on a one-to-one basis. Vested RSUs may become Earned RSUs on a pro-rata basis should the result of the market capitalization test be an increase of less than the target market threshold. Any Vested RSUs that do not become Earned RSUs on the Initial Valuation Date are subsequently remeasured on a quarterly basis until such time as all Vested RSUs become Earned RSUs or are forfeited due to termination of continuous service due to an event other than as a result of a qualified event, which is generally the death or disability of the holder. Continuous service through the final valuation date is required for the Vested RSUs to qualify to become fully Earned RSUs.

Because RSUs are valued using the identical market condition vesting requirement that determines the transition of the Vested Class B Units to Earned Class B Units, the same valuation assumptions per RSU were utilized to calculate the total fair values of the RSUs. The total fair value amounts pertaining to grants of RSUs, net of forfeitures, are amortized as compensation expense over the three one-year periods ending on the three successive anniversaries of the grant dates.

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Indebtedness

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Indebtedness

Mortgage Notes Payable

Mortgage Financing of Property Acquisitions

The Company partially financed the real estate properties acquired during the six-month period ended June 30, 2019 with mortgage debt as shown in the following table:

Property	Date	Initial principal amount (in thousands)		Fixed/Variable rate	Rate		Maturity date
Disston Plaza	6/12/2019	$	18,038	Fixed	3.93	%	7/1/2034
Polo Grounds Mall	6/12/2019	13,325		Fixed	3.93	%	7/1/2034
Free State Shopping Center	5/28/2019	46,800		Fixed	3.99	%	6/1/2029
Haven49 (1)	3/27/2019	41,550		Variable	6.15	%	12/22/2019
Gayton Crossing	1/17/2019	18,000		Fixed	4.71	%	2/1/2029
		$	137,713

⁽¹⁾ The Company assumed the existing construction loan on this property.

Repayments and Refinancings

On April 12, 2019, the Company refinanced the mortgage on its Royal Lakes Marketplace grocery-anchored shopping center. The existing $9.5 million mortgage bore interest at a variable rate of 1 month LIBOR plus 250 basis point and was refinanced into a $9.7 million mortgage which bears interest at a fixed rate of 4.29%. As a result of the refinance, the Company incurred approximately $0.3 million of expenses which were capitalized as deferred loan costs, and accelerated approximately $52,000 of remaining unamortized deferred loan costs associated with the prior loan, which is included within the interest expense line of the Consolidated Statements of Operations.

On April 12, 2019, the Company refinanced the mortgage on its Cherokee Plaza grocery-anchored shopping center. The existing $24.5 million mortgage bore interest at a variable rate of 1 month LIBOR plus 225 basis point and was refinanced into a $25.2 million mortgage which bears interest at a fixed rate of 4.28%. As a result of the refinance, the Company expensed approximately $317,000 of loan costs associated with the new loan, which is included within the interest expense line of the Consolidated Statements of Operations.

On February 28, 2019, the Company refinanced the mortgage on its Lenox Village Town Center multifamily community. The existing $29.2 million mortgage bore interest at a fixed rate of 3.82% and was refinanced into a $39.3 million mortgage which bears interest at a fixed rate of 4.34%. As a result of the refinance, the Company incurred approximately $0.6 million of expenses which were capitalized as deferred loan costs, and accelerated approximately $16,000 of remaining unamortized deferred loan costs associated with the prior loan, which is included within the interest expense line of the Consolidated Statements of Operations.

The sale of Lake Cameron on March 20, 2018 resulted in $402,000 of debt defeasance related costs, which were netted against the gain on the sale of the property.

On March 29, 2018, the Company refinanced the mortgage on its Sol student housing property. A short-term bridge loan was used to replace the mortgage being held on the Acquisition Facility. The mortgage principal balance of approximately $37.5 million remained the same under the new financing arrangement, and the existing variable interest rate increased 10 basis points, to 210 basis points over LIBOR. As a result of the refinance, the Company incurred expenses of approximately $41,000, which are included within the Interest Expense line of the Consolidated Statements of Operations.

The following table summarizes our mortgage notes payable at June 30, 2019:

(dollars in thousands)
Fixed rate mortgage debt:	Principal balances due			Weighted-average interest rate		Weighted average remaining life (years)
Multifamily communities	$	1,032,344		3.92	%	9.4
New Market Properties	552,606			3.93	%	7.6
Preferred Office Properties	484,773			4.32	%	14.6
Student housing properties	160,324			4.13	%	6.1
Total fixed rate mortgage debt	2,230,047			4.02	%	9.9
Variable rate mortgage debt:
Multifamily communities	80,482			4.29	%	4.4
New Market Properties	27,400			5.44	%	2.4
Preferred Office Properties	—			—		—
Student housing properties	131,916			5.98	%	1.1
Total variable rate mortgage debt	239,798			5.35	%	2.4
Total mortgage debt:
Multifamily communities	1,112,826			3.94	%	9.1
New Market Properties	580,006			4.01	%	7.4
Preferred Office Properties	484,773			4.32	%	14.6
Student housing properties	292,240			4.97	%	3.9
Total principal amount	2,469,845			4.15	%	9.1
Deferred loan costs	(35,849		)
Mark to market loan adjustment	(4,754		)
Mortgage notes payable, net	$	2,429,242

The Company has placed interest rate caps on the variable rate mortgages on its Avenues at Creekside and Citi Lakes multifamily communities. Under guidance provided by ASC 815-10, these interest rate caps fall under the definition of derivatives, which are embedded in their debt hosts. Because these interest rate caps are deemed to be clearly and closely related to their debt hosts, bifurcation and fair value accounting treatment is not required.

The mortgage note secured by our Independence Square property is a seven year term with an anticipated repayment date of September 1, 2022. If the Company elects not to pay its principal balance at the anticipated repayment date, the term will be extended for an additional five years, maturing on September 1, 2027. The interest rate from September 1, 2022 to September 1, 2027 will be the greater of (i) the Initial Interest Rate of 3.93% plus 200 basis points or (ii) the yield on the seven year U.S. treasury security rate plus approximately 400 basis points.

The mortgage note secured by our Champions Village property has a maximum commitment of approximately $34.2 million. As of June 30, 2019, the Company has an outstanding principal balance of $27.4 million. Additional advances of the mortgage commitment may be drawn as the Company achieves leasing activity, if elected by the Company. Additional advances are available through October 2019. This mortgage note has a variable interest of the greater of (i) 3.25% or (ii) the sum of the 3.00% plus the LIBOR Rate, which was 5.44% as of June 30, 2019.

As of June 30, 2019, the weighted-average remaining life of deferred loan costs related to the Company's mortgage indebtedness was approximately 9.7 years. Our mortgage notes have maturity dates between October 1, 2019 and June 1, 2054.

Credit Facility

The Company has a credit facility, or Credit Facility, with KeyBank National Association, or KeyBank, which defines a revolving line of credit, or Revolving Line of Credit, which is used to fund investments, capital expenditures, dividends (with consent of KeyBank), working capital and other general corporate purposes on an as needed basis. On March 23, 2018, the maximum borrowing capacity on the Revolving Line of Credit was increased to $200 million pursuant to an accordion feature. The accordion feature

permits the maximum borrowing capacity to be expanded or contracted without amending any further terms of the instrument. On December 12, 2018, the Fourth Amended and Restated Credit Agreement, or the Amended and Restated Credit Agreement, was amended to extend the maturity to December 12, 2021, with an option to extend the maturity date to December 12, 2022, subject to certain conditions described therein. The Revolving Line of Credit accrues interest at a variable rate of one month LIBOR plus an applicable margin of 2.75% to 3.50% per annum, depending upon the Company’s leverage ratio. The weighted average interest rate for the Revolving Line of Credit was 5.60% for the six-month period ended June 30, 2019. The Amended and Restated Credit Agreement also reduced the commitment fee on the average daily unused portion of the Revolving Line of Credit to 0.25% or 0.30% per annum, depending upon the Company’s outstanding Credit Facility balance.

On May 26, 2016, the Company entered into a $11.0 million interim term loan with KeyBank, or the Interim Term Loan, to partially finance the acquisition of Anderson Central, a grocery-anchored shopping center located in Anderson, South Carolina. The Interim Term Loan accrued interest at a rate of LIBOR plus 2.5% per annum until it was repaid and extinguished during the first quarter of 2018.

The Fourth Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including negative covenants that limit or restrict secured and unsecured indebtedness, mergers and fundamental changes, investments and acquisitions, liens and encumbrances, dividends, transactions with affiliates, burdensome agreements, changes in fiscal year and other matters customarily restricted in such agreements. The amount of dividends that may be paid out by the Company is restricted to a maximum of 95% of AFFO for the trailing four quarters without the lender's consent; solely for purposes of this covenant, AFFO is calculated as earnings before interest, taxes, depreciation and amortization expense, plus reserves for capital expenditures, less normally recurring capital expenditures, less consolidated interest expense.

As of June 30, 2019, the Company was in compliance with all covenants related to the Revolving Line of Credit, as shown in the following table:

Covenant (1)	Requirement		Result
Net worth	Minimum $1.7 billion	(2)	$1.8 billion
Debt yield	Minimum 8.25%		10.24%
Payout ratio	Maximum 95%	(3)	90.8%
Total leverage ratio	Maximum 65%		56.7%
Debt service coverage ratio	Minimum 1.50x		1.84x

⁽¹⁾ All covenants are as defined in the credit agreement for the Revolving Line of Credit.

⁽²⁾ Minimum of $686.9 million plus 75% of the net proceeds of any equity offering, which totaled approximately $1.0 billion as of June 30, 2019.

⁽³⁾ Calculated on a trailing four-quarter basis. For the twelve-month period ended June 30, 2019, the maximum dividends and distributions allowed under this covenant was approximately $151.0 million.

Loan fees and closing costs for the establishment and subsequent amendments of the Credit Facility are amortized utilizing the straight line method over the life of the Credit Facility. At June 30, 2019, unamortized loan fees and closing costs for the Credit Facility were approximately $1.4 million, which will be amortized over a remaining loan life of approximately 2.5 years. Loan fees and closing costs for the mortgage debt on the Company's properties are amortized utilizing the effective interest rate method over the lives of the loans.

Acquisition Facility

On February 28, 2017, the Company entered into a credit agreement, or Acquisition Credit Agreement, with Freddie Mac through KeyBank to obtain an acquisition revolving credit facility, or Acquisition Facility, with a maximum borrowing capacity of $200 million. The purpose of the Acquisition Facility is to finance acquisitions of multifamily communities and student housing communities. The maximum borrowing capacity on the Acquisition Facility may be increased at the Company's request up to $300 million at any time prior to March 1, 2021. On March 25, 2019, the maximum borrowing capacity was decreased to $90 million by agreement between the Company and KeyBank.The Acquisition Facility accrues interest at a variable rate of one month LIBOR plus a margin of between 1.75% per annum and 2.20% per annum, depending on the type of assets acquired and the resulting property debt service coverage ratio. The Acquisition Facility has a maturity date of March 1, 2022 and has two one-year extension options, subject to certain conditions described therein. At June 30, 2019, unamortized loan fees and closing costs for the establishment of the Acquisition Facility were approximately $0.2 million, which will be amortized over a remaining loan life of approximately 2.7 years. 

Interest Expense

Interest expense, including amortization of deferred loan costs was:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Multifamily communities	$	11,817	$	11,252	$	23,272	$	22,188
New Market Properties	6,115		4,629		11,701		8,985
Preferred Office Properties	5,357		2,666		10,708		5,207
Student housing properties	4,004		2,384		7,349		4,075
Interest paid to real estate loan participants	—		557		110		944
Total	27,293		21,488		53,140		41,399
Credit Facility and Acquisition Facility	318		859		1,227		1,916
Interest Expense	$	27,611	$	22,347	$	54,367	$	43,315

Future Principal Payments

The Company’s estimated future principal payments due on its debt instruments as of June 30, 2019 were:

Period	Future principal payments (in thousands)
2019	$	119,237
2020	73,063
2021	179,341
2022	219,111
2023	194,072
thereafter	1,685,021
Total	$	2,469,845

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Taxes [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

The Company elected to be taxed as a REIT effective with its tax year ended December 31, 2011, and therefore, the Company will not be subject to federal and state income taxes, so long as it distributes 100% of the Company's annual REIT taxable income (which does not equal net income as calculated in accordance with GAAP and determined without regard for the deduction for dividends paid and excluding net capital gains) to its stockholders. For the Company's tax years prior to its REIT election year, its operations resulted in a tax loss. As of December 31, 2010, the Company had deferred federal and state tax assets totaling approximately $298,100, none of which were based upon tax positions deemed to be uncertain. These deferred tax assets will most likely not be used since the Company elected REIT status; therefore, management has determined that a 100% valuation allowance is appropriate as of June 30, 2019 and December 31, 2018.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

On March 28, 2014, the Company entered into a payment guaranty in support of its Manager's eleven-year office lease, which began on October 9, 2014. As of June 30, 2019, the amount guarantied by the Company was $5.5 million and is reduced by $619,304 per lease year over the term of the lease.

Certain officers and employees of the Manager have been assigned company credit cards. As of June 30, 2019, the Company guarantied up to $640,000 on these credit cards.

The Company is otherwise currently subject to neither any known material commitments or contingencies from its business operations, nor any material known or threatened litigation.

A total of approximately $18.1 million of asset management and general and administrative fees related to acquired properties as of June 30, 2019 have been waived by the Manager.  The waived fees are converted at the time of waiver into contingent fees, which are earned by the Manager as an additional disposition fee only in the event of a sales transaction, and whereby the Company’s capital contributions for the property being sold exceed a 7% annual rate of return.  The Company will recognize in future periods to the extent, if any, it determines that the sales transaction is probable, and that the estimated net sale proceeds would exceed the annual rate of return hurdle.  As of June 30, 2019, a total of $16.6 million remaining waived fees could possibly be earned by the Manager in the future.  

At June 30, 2019, the Company had unfunded balances on its real estate loan portfolio of approximately $81.0 million.

At June 30, 2019, the Company had unfunded contractual commitments for tenant, leasing, and capital improvements of approximately $14.2 million.

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Segment information

6 Months Ended

Jun. 30, 2019

Segment Information [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Information

The Company's Chief Operating Decision Maker, or CODM, evaluates the performance of the Company's business operations and allocates financial and other resources by assessing the financial results and outlook for future performance across five distinct segments: multifamily communities, student housing properties, real estate related financing, New Market Properties and Preferred Office Properties.

Multifamily Communities - consists of the Company's portfolio of owned residential multifamily communities

Student Housing Properties - consists of the Company's portfolio of owned student housing properties.

Financing - consists of the Company's portfolio of real estate loans, bridge loans, and other instruments deployed by the Company to partially finance the development, construction, and prestabilization carrying costs of new multifamily communities and other real estate and real estate related assets. Excluded from the financing segment are consolidated assets of VIEs and financial results of the Company's Dawson Marketplace grocery-anchored shopping center real estate loan, which are included in the New Market Properties segment.

New Market Properties - consists of the Company's portfolio of grocery-anchored shopping centers, which are owned by New Market Properties, LLC, a wholly-owned subsidiary of the Company, as well as the financial results from the Company's grocery-anchored shopping center real estate loans.

Preferred Office Properties - consists of the Company's portfolio of office buildings.

The CODM monitors net operating income (“NOI”) on a segment and a consolidated basis as a key performance measure for its operating segments. NOI is defined as rental and other property revenue from real estate assets plus interest income from its loan portfolio less total property operating and maintenance expenses, property management fees, real estate taxes, property insurance, and general and administrative expenses. The CODM uses NOI as a measure of operating performance because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs, acquisition expenses, and other expenses generally incurred at the corporate level.  

The following tables present the Company's assets, revenues, and NOI results by reportable segment, as well as a reconciliation from NOI to net income (loss). The assets attributable to 'Other' primarily consist of  deferred offering costs recorded but not yet reclassified as reductions of stockholders' equity and cash balances at the Company and Operating Partnership levels.

(in thousands)	June 30, 2019		December 31, 2018
Assets:
Multifamily communities	$	1,480,775	$	1,503,648
Student housing properties	496,021		411,102
Financing	497,055		448,617
New Market Properties	1,026,418		883,594
Preferred Office Properties	878,848		884,648
Other (1)	601,401		279,349
Consolidated assets	$	4,980,518	$	4,410,958
(1) Other Assets includes $571,999 and $264,886 of assets owned by other pool participants within the Freddie Mac K Program that were consolidated by the Company. The Company's maximum exposure to loss from the combined mortgage pools from the Freddie Mac K Program is approximately $24.1 million.

Total capitalized expenditures (inclusive of additions to construction in progress, but exclusive of the purchase price of acquisitions) for the three-month and six-month periods ended June 30, 2019 and 2018 were as follows:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Capitalized expenditures:
Multifamily communities	$	3,633	$	5,859	$	4,845	$	10,698
Student housing properties	910		927		1,823		1,208
New Market Properties	1,427		1,002		3,004		1,787
Total	$	5,970	$	7,788	$	9,672	$	13,693

Second-generation capital expenditures exclude those expenditures made in our office building portfolio (i) to lease space to "first generation" tenants (i.e. leasing capital for existing vacancies and known move-outs at the time of acquisition), (ii) to bring recently acquired properties up to our Class A ownership standards (and which amounts were underwritten into the total investment at the time of acquisition), (iii) for property redevelopments and repositionings (iv) to newly leased space which had been vacant for more than one year and (v) for building improvements that are recoverable from future operating cost savings.

Total revenues by reportable segment of the Company were:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Revenues
Rental revenues:
Multifamily communities	$	40,848	$	38,896	$	81,162	$	77,758
Student housing properties	11,433		7,097		21,457		12,766
New Market Properties	22,346		17,567		43,875		34,906
Preferred Office Properties (1)	20,965		12,992		41,336		25,384
Total rental revenues	95,592		76,552		187,830		150,814
Other revenues:
Multifamily communities	1,345		1,436		2,640		2,729
Student housing properties	210		107		404		190
New Market Properties	536		645		1,066		1,221
Preferred Office Properties	1,883		118		2,454		206
Total other revenues	3,974		2,306		6,564		4,346
Financing revenues	13,263		17,531		29,941		31,599
Miscellaneous revenues	1,023		—		1,023		—
Consolidated revenues	$	113,852	$	96,389	$	225,358	$	186,759
(1) Included in rental revenues for our Preferred Office Properties segment is the amortization of deferred revenue for tenant-funded leasehold improvements from a major tenant in our Three Ravinia and Westridge office buildings. As of June 30, 2019, the Company has deferred revenue in an aggregate amount of $47.0 million in connection with such improvements. The remaining balance to be recognized is approximately $41.6 million which is included in the deferred revenues line on the consolidated balance sheets at June 30, 2019. These total costs will be amortized over the lesser of the useful lives of the improvements or the individual lease terms. The Company recorded non-cash revenue of approximately $1.9 million and $1.1 million for the six-month periods ended June 30, 2019 and 2018, respectively.

	Three-month periods ended June 30,						Six-month periods ended June 30,
(in thousands)	2019			2018			2019			2018
Segment net operating income (Segment NOI)
Multifamily communities	$	24,146		$	22,745		$	48,390		$	46,268
Student housing properties	7,150			3,905			12,241			6,941
Financing	13,286			17,531			29,965			31,599
New Market Properties	16,425			12,812			32,230			25,485
Preferred Office Properties	16,515			9,334			31,320			18,397
Consolidated segment net operating income	77,522			66,327			154,146			128,690
Interest expense:
Multifamily communities	11,816			11,252			23,272			22,188
Student housing properties	4,005			2,384			7,349			4,075
New Market Properties	6,115			4,630			11,701			8,985
Preferred Office Properties	5,357			2,666			10,708			5,207
Financing	318			1,415			1,337			2,860
Depreciation and amortization:
Multifamily communities	18,391			20,320			38,802			42,023
Student housing properties	6,179			7,496			11,633			12,601
New Market Properties	10,632			9,177			20,967			18,057
Preferred Office Properties	10,461			5,102			19,550			10,030
Professional fees	888			769			1,773			1,243
Management fees, net of forfeitures	5,414			5,192			10,614			10,213
Loan loss allowance	—			—			—			—
Equity compensation to directors and executives	306			950			617			2,085
Gain on sale of real estate	—			(2		)	—			(20,356		)
Gain on noncash net assets of consolidated VIEs	(584		)	(54		)	(725		)	(54		)
Gain loss on sale of real estate loan investment	(747		)	—			(747		)	—
Loss on extinguishment of debt	52			—			69			—
Gain on trading investment, net	—			—			(4		)	—
Other	596			308			1,187			548
Net income (loss)	$	(1,677	)	$	(5,278	)	$	(3,957	)	$	8,985

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Loss per Share

6 Months Ended

Jun. 30, 2019

Loss per share [Abstract]

Earnings Per Share [Text Block]

The following is a reconciliation of weighted average basic and diluted shares outstanding used in the calculation of income (loss) per share of Common Stock:

		Three-month periods ended June 30,						Six-month periods ended June 30,
	(in thousands, except per-share figures)	2019			2018			2019			2018
Numerator:
	Operating income before gains on sales of real estate and trading investment	$	24,655		$	17,013		$	49,003		$	31,890
	Gains on sales of real estate and trading investment	—			2			4			20,356
	Operating income	24,655			17,015			49,007			52,246
	Interest expense	27,611			22,347			54,367			43,315
	Change in fair value of net assets of consolidated VIEs from mortgage-backed pools	584			54			725			54
	Loss on extinguishment of debt	(52		)	—			(69		)	—
	Gain on sale of real estate loan investment	747			—			747			—
	Net (loss) income	(1,677		)	(5,278		)	(3,957		)	8,985
	Consolidated net loss (income) attributable to non-controlling interests	571			140			79			(240		)
	Net (loss) income attributable to the Company	(1,106		)	(5,138		)	(3,878		)	8,745
	Dividends declared to preferred stockholders	(27,542		)	(20,924		)	(53,081		)	(40,441		)
	Earnings attributable to unvested restricted stock	(7		)	(6		)	(9		)	(8		)
	Net loss attributable to common stockholders	$	(28,655	)	$	(26,068	)	$	(56,968	)	$	(31,704	)
Denominator:
	Weighted average number of shares of Common Stock - basic	43,703			39,383			43,194			39,241
	Effect of dilutive securities: (D)	—			—			—			—
	Weighted average number of shares of Common Stock - basic and diluted	43,703			39,383			43,194			39,241
	Net loss per share of Common Stock attributable to
	common stockholders, basic and diluted	$	(0.66	)	$	(0.66	)	$	(1.32	)	$	(0.81	)

^(A) The Company's outstanding Class A Units of the Operating Partnership (875 and 1,070 Units at June 30, 2019 and 2018, respectively) contain rights to distributions in the same amount per unit as for dividends declared on the Company's Common Stock. The impact of the Class A Unit distributions on earnings per share has been calculated using the two-class method whereby earnings are allocated to the Class A Units based on dividends declared and the Class A Units' participation rights in undistributed earnings.

^(B) The Company’s shares of Series A Preferred Stock outstanding accrue dividends at an annual rate of 6% of the stated value of $1,000 per share, payable monthly. The Company had 1,829 and 1,418 outstanding shares of Series A Preferred Stock at June 30, 2019 and 2018, respectively. The Company's shares of Series M preferred stock, or mShares, accrue dividends at an escalating rate of 5.75% in year one to 7.50% in year eight and thereafter. The Company had 73 and 29 mShares outstanding at June 30, 2019 and 2018, respectively.

^(C) The Company's outstanding unvested restricted share awards (26 and 25 shares of Common Stock at June 30, 2019 and 2018, respectively) contain non-forfeitable rights to distributions or distribution equivalents. The impact of the unvested restricted share awards on earnings per share has been calculated using the two-class method whereby earnings are allocated to the unvested restricted share awards based on dividends declared and the unvested restricted shares' participation rights in undistributed earnings. Given the Company's unvested restricted share awards are defined as participating securities, the dividends declared for that period are adjusted in determining the calculation of loss per share of Common Stock.

^(D) Potential dilution from (i) warrants outstanding from issuances of Units from our Series A Preferred Stock offerings that are potentially exercisable into 27,246 shares of Common Stock; (ii) 93 Class B Units; (iii) 26 shares of unvested restricted common stock; and (iv) 49 outstanding Restricted Stock Units are excluded from the diluted shares calculations because the effect was antidilutive. Class A Units were excluded from the denominator because earnings were allocated to non-controlling interests in the calculation of the numerator.

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Fair Values of Financial Instruments

6 Months Ended

Jun. 30, 2019

Fair Values of Financial Instruments [Abstract]

Fair Value Disclosures [Text Block]

Fair Values of Financial Instruments

Fair value is defined as the price at which an asset or liability is exchanged between market participants in an orderly transaction at the reporting date. The Company’s cash equivalents, notes receivable, accounts receivable and payables and accrued expenses all approximate fair value due to their short term nature.

The following tables provide estimated fair values of the Company’s financial instruments. The carrying values of the Company's real estate loans include accrued interest receivable from additional interest or exit fee provisions and are presented net of deferred loan fee revenue, where applicable.

	As of June 30, 2019
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Real estate loans	$	360,180	$	392,279	$	—	$	—	$	392,279
Notes receivable and line of credit receivable	45,143		45,143		—		—		45,143
	$	405,323	$	437,422	$	—	$	—	$	437,422
Financial Liabilities:
Mortgage notes payable	$	2,469,845	$	2,522,323	$	—	$	—	$	2,522,323

	As of December 31, 2018
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Real estate loans (1)	$	334,211	$	366,328	$	—	$	—	$	366,328
Notes receivable and line of credit receivable	47,307		47,307		—		—		47,307
	$	381,518	$	413,635	$	—	$	—	$	413,635
Financial Liabilities:
Mortgage notes payable	$	2,339,752	2,313,405		$	—	$	—	$	2,313,405
Revolving credit facility	57,000		57,000		—		—		57,000
Loan participation obligations	5,181		5,181		—		—		5,181
	$	2,401,933	$	2,375,586	$	—	$	—	$	2,375,586

⁽¹⁾ The carrying value of real estate assets at December 31, 2018 included the Company's balance of the Palisades real estate loan investment, which included the amounts funded by an unrelated participant. On March 13, 2019, the Company repurchased the loan participant's 25% balance in the loan from the loan participant and at June 30, 2019, carried the entire loan balance on its consolidated balance sheet without reflection of any liability to any third party.

The fair value of the real estate loans within the level 3 hierarchy are comprised of estimates of the fair value of the notes, which were developed utilizing a discounted cash flow model over the remaining terms of the notes until their maturity dates and utilizing discount rates believed to approximate the market risk factor for notes of similar type and duration. The fair values also contain a separately-calculated estimate of any applicable additional interest payment due the Company at the maturity date of the loan, based on the outstanding loan balances at June 30, 2019, discounted to the reporting date utilizing a discount rate believed to be appropriate for multifamily development projects.

The fair values of the fixed rate mortgages on the Company’s properties were developed using market quotes of the fixed rate yield index and spread for 4, 5, 6, 7, 10, 15, 25 and 35 year notes as of the reporting date. The present values of the cash flows were calculated using the original interest rate in place on the fixed rate mortgages and again at the current market rate. The difference between the two results was applied as a fair market adjustment to the carrying value of the mortgages.

The following table presents activity of the two mortgage pools from the Freddie Mac K Programas of and for the six-month period ended June 30, 2019:

	Assets			Liabilities
(in thousands)	Multifamily mortgage loans held in VIEs at fair value			VIE liabilities, at fair value			Net
Balance as of December 31, 2018	$	269,946		$	264,886		$	5,060
Initial consolidation of ML-05 trust:	289,325			270,670			18,655
Gains (losses) included in net income due to change in fair value of net assets of VIE:	38,931			38,516			415
Repayments of underlying mortgage principal amounts and repayments to Class A holders:	(2,073		)	(2,073		)	—
Balance as of June 30, 2019	$	596,129		$	571,999		$	24,130

The changes in the fair value of the net assets of consolidated VIEs from mortgage-backed pools were:

	Three months ended				Six months ended
	June 30,				June 30,
(in thousands)	2019		2018		2019		2018
Interest earned	$	310	$	—	$	310	$	—
Unrealized gain	274		54		415		54
Change in fair value of net assets of consolidated VIEs from mortgage-backed pools	$	584	$	54	$	725	$	54

The following table presents the level 3 input used to calculate the fair value of the consolidated assets and liabilities of the two VIEs:

(in thousands)	Fair value		Valuation methodology	Unobservable input
Assets:
Multifamily mortgage loans held in VIEs at fair value	$	596,129	Discounted cash flow	Discount rate	3.9	%
Liabilities:
VIE liabilities, at fair value	$	571,999	Discounted cash flow	Discount rate	3.9	%

The following tables present the estimated fair values of the consolidated assets and liabilities from the two VIEs for which the Company has elected the fair value option.

	As of June 30, 2019
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
VIE assets from mortgage-backed pools	$	596,129	$	596,129	$	—	$	—	$	596,129
Financial Liabilities:
VIE liabilities from mortgage-backed pools	$	571,999	$	571,999	$	—	$	—	$	571,999

	December 31, 2018
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
VIE assets from mortgage-backed pools	$	269,946	$	269,946	$	—	$	—	$	269,946
Financial Liabilities:
VIE liabilities from mortgage-backed pools	$	264,886	$	264,886	$	—	$	—	$	264,886

Disclosure guidance under GAAP requires the Company to determine whether the fair value of the financial assets or the fair value of the financial liabilities of the two mortgage pools is more observable. The VIE assets within the two mortgage pools consist of mortgage loans which finance 40 and 20 multifamily communities at June 30, 2019 and December 31, 2018, respectively. The fair value of the VIE assets within the level 3 hierarchy are comprised of the fair value of the mortgages as estimated by the Company, which were developed utilizing a discounted cash flow model over the remaining terms of the mortgages until their maturity dates and utilizing discount rates believed to approximate the market risk factor for instruments of similar type and duration. The fair values of the notes are categorized within the level 3 hierarchy of fair value estimation as the discount rate primary input assumption is unobservable.

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Subsequent Events

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

Between July 1, 2019 and July 31, 2019, the Company issued 38,684 Units under its $1.5 Billion Unit Offering and collected net proceeds of approximately $34.8 million after commissions and fees and issued 4,896 shares of Series M Preferred Stock under the mShares offering and collected net proceeds of approximately $4.7 million after commissions and fees.

On July 25, 2019, we acquired CAPTRUST Tower, a class A office building in Raleigh, North Carolina comprising 300,389 rentable square feet.

On July 29, 2019, we refinanced the mortgage on our Citilakes multifamily community from a floating to a fixed interest rate of 3.66%.

On July 29, 2019, we entered into a purchase and sale agreement pursuant to which we will sell six of our student housing properties to a third party. The properties to be sold are North by Northwest, Sol, Stadium Village, Ursa, The Retreat at Orlando and Haven49. A non-refundable security deposit from the purchaser has been deposited into an escrow account and we expect the sale to close during fourth quarter 2019. We expect to realize a book gain on the sale.

On July 31, 2019, we acquired 251 Armour Drive, an approximately 36,000 square foot building adjacent to our 187,000 square foot Armour Yards office portfolio in Atlanta, Georgia.

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Significant Accounting Policies Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2019

Summary of Significant Accounting Policies [Abstract]

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

s

Goodwill and Intangible Assets, Policy [Policy Text Block]

s

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements

Standard	Description	Date of Adoption	Effect on the Consolidated Financial Statements
Recently Adopted Accounting Guidance
ASU 2016-02, Leases (Topic 842) ASU 2018-11, Leases (Topic 842) Targeted Improvements	ASU 2016-02 requires a lessor to separate lease components from non-lease components, such as maintenance services or other activities that transfer a good or service to our residents and tenants in a contract. In July 2018, the FASB issued ASU 2018-11 which allowed for a practical expedient for lessors to elect, by class of underlying assets, to not separate lease and non-lease components if both (1) the timing and pattern of revenue recognition are the same for the non-lease component(s) and related lease component and (2) the combined single lease component would be classified as an operating lease. Additional practical expedients were also provided for under ASU 2018-11 related to expired or existing leases.	January 1, 2019	Having met the criteria that (i) the timing and pattern of transfer for the lease component and associated non-lease components are the same and (ii) that the lease component, if accounted for separately would be classified as an operating lease, the Company has elected the practical expedient within ASU 2018-11, as codified under ASC 842-10-15-42A, to elect reporting the lease component and non-lease components as one single component under Rental Revenues recognized in accordance with ASC 842. This change had no material effect on the timing of revenue recognition. The Company has also elected to implement the package of practical expedients provided within ASU 2018-11, as codified under ASC 842-10-65-1(f), which allows the Company not to reassess whether expired or existing contracts contain leases, its lease classification, and any related initial direct costs.
ASU 2018-20, Leases (ASC 842), Narrow-Scope Improvements for Lessors	ASU 2018-20 eliminates the requirement to record income and offsetting expense for certain variable costs paid for by lessees on behalf of lessors.	January 1, 2019	The Company no longer records income and expense for property taxes paid directly to the taxing authority by a lessee based on this standard. The effect is a reduction of other property revenues and of property tax expense, with no effect upon net income/loss.
Recently Issued Accounting Guidance Not Yet Adopted
ASU 2016-13, Financial Instruments - Credit Losses (ASC 326)	ASU 2016-03 changes how entities will measure credit losses for most financial assets, including loans, which are not measured at fair value through net income. The guidance replaces the existing incurred loss model with an expected loss model for instruments measured at amortized cost, and require entities to record credit allowances for financial assets rather than reduce the carrying amount, as they do today under the other-than temporary impairment model.	January 1, 2020	We are currently evaluating the potential impacts of the new guidance and proposed amendments to the new guidance on our consolidated financial statements. The new guidance specifically excludes financial assets measured at fair value through net income. The Company elected the fair value option for its Freddie Mac K Program investments. Therefore, we expect the impact of the new guidance on accounting for financial assets will be limited to our real estate investment loans and notes and revolving lines of credit. We expect to implement this new guidance using the modified retrospective basis by recording a cumulative effect adjustment to retained earnings on January 1, 2020.

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Real Estate Assets (Tables)

6 Months Ended

Jun. 30, 2019

Business Acquisition

Business Combination Disclosure

Real Estate Assets

The Company's real estate assets consisted of:

	As of:
	June 30, 2019	December 31, 2018
Multifamily communities:
Properties (1)	32	32
Units	9,768	9,768
New Market Properties: (2)
Properties	49	45
Gross leasable area (square feet) (3)	5,412,328	4,730,695
Student housing properties:
Properties	8	7
Units	2,011	1,679
Beds	6,095	5,208
Preferred Office Properties:
Properties	7	7
Rentable square feet	2,578,000	2,578,000
(1) The acquired second phases of CityPark View and Crosstown Walk communities are managed in combination with the initial phases and so together are considered a single property, as are the Lenox Village and Regent at Lenox Village assets within the Lenox Portfolio.
(2) See Note 13, Segment information.
(3) The Company also owns approximately 47,600 square feet of gross leasable area of ground floor retail space which is embedded within the Lenox Portfolio and is not included in the totals above for New Market Properties.

Multifamily communities sold

The Company had no sales of multifamily community assets during the six-month period ended June 30, 2019.

On March 20, 2018, the Company closed on the sale of its 328-unit multifamily community in Raleigh, North Carolina, or Lake Cameron, to an unrelated third party for a purchase price of approximately $43.5 million, exclusive of closing costs, and debt defeasance-related costs and resulted in a gain of $20.4 million. Lake Cameron contributed approximately $0.2 million of net income to the consolidated operating results of the Company for the six-month period ended June 30, 2018.

The carrying amounts of the significant assets and liabilities of the disposed property at the date of sale were:

	Lake Cameron
(in thousands)	June 30, 2018
Real estate assets:
Land	$	4,000
Building and improvements	21,519
Furniture, fixtures and equipment	3,687
Accumulated depreciation	(7,220		)
Total assets	$	21,986
Liabilities:
Mortgage note payable	$	19,736
Supplemental mortgage note	—
Total liabilities	$	19,736

Multifamily communities acquired

The Company had no acquisitions of multifamily community assets during the six-month period ended June 30, 2019.

During the six-month period ended June 30, 2018, the Company completed the acquisition of the following multifamily communities:

Acquisition date	Property	Location	Units
1/9/2018	The Lux at Sorrel	Jacksonville, Florida	265
2/28/2018	Green Park	Atlanta, Georgia	310
			575

The aggregate purchase prices of the multifamily acquisitions for the six-month period ended June 30, 2018 were approximately $106.5 million, exclusive of acquired escrows, security deposits, prepaids, capitalized acquisition costs and other miscellaneous assets and assumed liabilities.

schedule of depreciation and amortization expense [Table Text Block]

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Depreciation:
Buildings and improvements	$	24,190	$	18,356	$	47,177	$	35,834
Furniture, fixtures, and equipment	12,532		11,398		25,665		21,910
	36,722		29,754		72,842		57,744
Amortization:
Acquired intangible assets	8,617		12,209		17,563		24,709
Deferred leasing costs	276		105		453		196
Website development costs	48		27		94		62
Total depreciation and amortization	$	45,663	$	42,095	$	90,952	$	82,711

real estate sold [Table Text Block]

The carrying amounts of the significant assets and liabilities of the disposed property at the date of sale were:

	Lake Cameron
(in thousands)	June 30, 2018
Real estate assets:
Land	$	4,000
Building and improvements	21,519
Furniture, fixtures and equipment	3,687
Accumulated depreciation	(7,220		)
Total assets	$	21,986
Liabilities:
Mortgage note payable	$	19,736
Supplemental mortgage note	—
Total liabilities	$	19,736

real estate owned [Table Text Block]

The Company's real estate assets consisted of:

	As of:
	June 30, 2019	December 31, 2018
Multifamily communities:
Properties (1)	32	32
Units	9,768	9,768
New Market Properties: (2)
Properties	49	45
Gross leasable area (square feet) (3)	5,412,328	4,730,695
Student housing properties:
Properties	8	7
Units	2,011	1,679
Beds	6,095	5,208
Preferred Office Properties:
Properties	7	7
Rentable square feet	2,578,000	2,578,000
(1) The acquired second phases of CityPark View and Crosstown Walk communities are managed in combination with the initial phases and so together are considered a single property, as are the Lenox Village and Regent at Lenox Village assets within the Lenox Portfolio.
(2) See Note 13, Segment information.
(3) The Company also owns approximately 47,600 square feet of gross leasable area of ground floor retail space which is embedded within the Lenox Portfolio and is not included in the totals above for New Market Properties.

multifamily community [Domain]

Business Acquisition

Business Combination Disclosure

	Multifamily Communities acquired during the six-month period ended:
(in thousands, except amortization period data)	June 30, 2018
Land	$	12,810
Buildings and improvements	73,773
Furniture, fixtures and equipment	17,969
Lease intangibles	4,306
Prepaids & other assets	193
Accrued taxes	(166		)
Security deposits, prepaid rents, and other liabilities	(183		)
Net assets acquired	$	108,702
Cash paid	$	37,427
Mortgage debt, net	71,275
Total consideration	$	108,702
Three-month period ended June 30, 2019:
Revenue	$	2,567
Net income (loss)	$	(1,032	)
Six-month period ended June 30, 2019:
Revenue	$	5,124
Net income (loss)	$	(2,332	)
Capitalized acquisition costs incurred by the Company	$	2,347
Acquisition costs paid to related party (included above)	$	1,094
Remaining amortization period of intangible
assets and liabilities (months)	0

Table of Properties Acquired

The Company had no acquisitions of multifamily community assets during the six-month period ended June 30, 2019.

During the six-month period ended June 30, 2018, the Company completed the acquisition of the following multifamily communities:

Acquisition date	Property	Location	Units
1/9/2018	The Lux at Sorrel	Jacksonville, Florida	265
2/28/2018	Green Park	Atlanta, Georgia	310
			575

The aggregate purchase prices of the multifamily acquisitions for the six-month period ended June 30, 2018 were approximately $106.5 million, exclusive of acquired escrows, security deposits, prepaids, capitalized acquisition costs and other miscellaneous assets and assumed liabilities.

student housing community [Domain]

Business Acquisition

Business Combination Disclosure

The Company allocated the assets' fair value and capitalized acquisition costs to the acquired assets and liabilities based upon their fair values, as shown in the following table. The purchase price allocations were based upon the Company's best estimates of the fair values of the acquired assets and liabilities.

	Student housing properties acquired during the six-month periods ended:
(in thousands, except amortization period data)	June 30, 2019			June 30, 2018
Land	$	7,289		$	23,149
Buildings and Improvements	68,163			146,856
Furniture, fixtures and equipment	16,966			27,211
Lease intangibles	983			2,493
Below market leases	—			(54		)
Prepaids & Other Assets	—			309
Accrued taxes	(158		)	(942		)
Security Deposits, Prepaid Rents, and other liabilities	(2,579		)	(719		)
Net Assets Acquired	$	90,664		$	198,303
Satisfaction of loan receivables	$	46,397		$	—
Cash paid	2,717			92,212
Mortgage debt, net	41,550			106,091
Total consideration	$	90,664		$	198,303
Three-month period ended June 30, 2019:
Revenue	$	1,534		4,289
Net income (loss)	$	(1,653	)	(1,614		)
Six-month period ended June 30, 2019:
Revenue	1,615			8,603
Net income (loss)	(1,924		)	(4,053		)
Capitalized acquisition costs incurred by the Company	$	1,016		$	2,555
Acquisition costs to related party	$	936		$	1,970
Remaining amortization period of intangible
assets and liabilities (months)	0.5			0

Table of Properties Acquired

Retail Segment [Member]

Business Acquisition

Business Combination Disclosure

Preferred Office Properties assets acquired

The Company had no acquisitions of office building assets during the six-month period ended June 30, 2019.

On January 29, 2018, the Company acquired Armour Yards, a collection of four adaptive re-use office buildings comprised of approximately 187,000 square feet of office space in Atlanta, Georgia. The aggregate purchase price was approximately $66.5 million, exclusive of acquired escrows, security deposits, prepaids, capitalized acquisition costs and other miscellaneous assets and assumed liabilities.

The Company allocated the purchase price and capitalized acquisition costs to the acquired assets and liabilities based upon their fair values, as shown in the following table. The purchase price allocations were based upon the Company's best estimates of the fair values of the acquired assets and liabilities.

	Preferred Office Properties' acquisition during the six-month period ended:
(in thousands, except amortization period data)	June 30, 2018
Land	$	6,756
Buildings and improvements	48,332
Tenant improvements	6,201
In-place leases	3,762
Above-market leases	61
Leasing costs	2,181
Below-market leases	(1,594		)
Security deposits, prepaid rents, and other liabilities	(4,335		)
Net assets acquired	$	61,364
Cash paid	$	21,364
Mortgage debt, net	40,000
Total consideration	$	61,364
Three-month period ended June 30, 2019:
Revenue	$	1,588
Net income (loss)	$	2
Six-month period ended June 30, 2019:
Revenue	$	3,123
Net income (loss)	$	(4	)
Capitalized acquisition costs incurred by the Company	$	817
Acquisition costs paid to related party (included above)	$	665
Remaining amortization period of intangible
assets and liabilities (years)	7.1

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Real Estate Loans, Notes Receivable, and Lines of Credit (Tables)

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

(Dollars in thousands)	June 30, 2019			December 31, 2018
Number of loans	20			19
Drawn amount	$	362,045		$	336,329
Deferred loan origination fees	(1,865		)	(2,118		)
Carrying value	$	360,180		$	334,211
Unfunded loan commitments	$	81,017		$	164,913
Weighted average current interest, per annum (paid monthly)	8.48		%	8.47		%
Weighted average accrued interest, per annum	4.02		%	5.34		%

(Dollars in thousands)	Principal balance			Deferred loan origination fees			Loan loss allowance		Carrying value
Balances as of December 31, 2018	$	336,329		$	(2,118	)	$	—	$	334,211
Loan fundings	53,497			—			—		53,497
Loans settled with acquisitions	(27,781		)	—			—		(27,781		)
Loan origination fees collected	—			(526		)	—		(526		)
Amortization of loan origination fees	—			779			—		779
Balances as of June 30, 2019	$	362,045		$	(1,865	)	$	—	$	360,180

Property type	Number of loans	Carrying value		Commitment amount		Percentage of portfolio
(Dollars in thousands)
Multifamily communities	15	$	306,351	$	370,563	84	%
Student housing properties	3	37,851		40,448		11	%
New Market Properties	1	12,857		12,857		4	%
Preferred Office Properties	1	3,121		19,193		1	%
Balances as of June 30, 2019	20	$	360,180	$	443,061

Financing Receivable Credit Quality Indicators [Table Text Block]

At June 30, 2019, the Company's portfolio of real estate loan investments by credit quality indicator was:

(In thousands)
Rating indicator	Principal balance		Accrued interest		Receivables for purchase option terminations		Total
A	$	317,619	$	20,688	$	7,900	$	346,207
B	38,310		2,510		—		40,820
C	6,116		1,208		—		7,324
D	—		—		—		—
	$	362,045	$	24,406	$	7,900	$	394,351

Notes receivable [Table Text Block]

ur portfolio of notes and lines of credit receivable consisted of:

Borrower	Date of loan	Maturity date	Total loan commitments		Outstanding balance as of:						Interest rate
					June 30, 2019			December 31, 2018
(Dollars in thousands)
Preferred Capital Marketing Services, LLC (1)	1/24/2013	12/31/2019	$	1,500	$	686		$	763		10	%
Preferred Apartment Advisors, LLC (1,2)	8/21/2012	12/31/2019	22,000		16,842			9,778			7.5	%	(3)
Haven Campus Communities, LLC (1,4)	6/11/2014	12/31/2018	11,660		8,374			11,620			8	%
Oxford Capital Partners, LLC (5)	10/5/2015	6/30/2020	8,000		6,589			4,022			12	%
Newport Development Partners, LLC	6/17/2014	6/30/2020	2,000		1,529			—			12	%
Mulberry Development Group, LLC (6)	3/31/2016	6/30/2020	750		455			465			12	%
360 Capital Company, LLC (6)	5/24/2016	12/31/2019	3,400		3,292			3,100			12	%
360 Capital Company, LLC (1,7)	7/24/2018	12/31/2020	8,000		7,426			6,923			8.5	%
Haven Campus Communities Charlotte Member, LLC (1)	8/31/2018	N/A	—		—			10,788			15	%
Unamortized loan fees					(51		)	(152		)
			$	57,310	$	45,142		$	47,307
(1) See related party disclosure in Note 6.
(2) The amounts payable under this revolving credit line were collateralized by an assignment of the Manager's rights to fees due under the Sixth Amended and Restated Management Agreement between the Company and the Manager, or the Management Agreement.
(3) Effective January 1, 2019, the interest rate was increased from 6.0% per annum to 7.5% per annum and the maturity date was extended to December 31, 2019.
(4) The amount payable under this note is collateralized by one of the principals of the borrower's 49.49% interest in an unrelated shopping center located in Atlanta, Georgia and a personal guaranty of repayment by the principals of the borrower.
(5) The amounts payable under the terms of this revolving credit line, up to the lesser of 25% of the loan balance or $2.0 million, are collateralized by a personal guaranty of repayment by the principals of the borrower.
(6) The amounts payable under the terms of these revolving credit lines are collateralized by a personal guaranty of repayment by the principals of the borrower.
(7) The amount payable under the note is collateralized by the developer's interest in the Fort Myers multifamily community project and a personal guaranty of repayment by the principals of the borrower.

interest income [Table Text Block]

The Company recorded interest income and other revenue from these instruments as follows:

Interest income	Three months ended June 30,				Six months ended June 30,
(in thousands)	2019		2018		2019		2018
Real estate loans:
Current interest payments	$	7,479	$	8,686	$	14,948	$	17,191
Additional accrued interest	3,184		5,469		6,569		10,195
Origination fee amortization	465		607		780		1,038
Purchase option termination fee amortization	1,383		2,470		5,617		2,470
Total real estate loan revenue	12,511		17,232		27,914		30,894
Interest income on notes and lines of credit	925		800		2,414		1,703
Interest income from money market accounts	280		—		280		—
Interest income from agency mortgage-backed securities	9		—		207		—
Interest income on loans and notes receivable	$	13,725	$	18,032	$	30,815	$	32,597

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Redeemable Preferred Stock Proceeds and offering costs (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Schedule of Stockholders Equity [Table Text Block]

As of June 30, 2019, cumulative gross proceeds and offering costs for our active equity offerings consisted of:

(In thousands)							Deferred Offering Costs
Offering	Total offering				Gross proceeds as of June 30, 2019		Reclassified as reductions of stockholders' equity				Recorded as deferred assets		Total		Specifically identifiable offering costs (1)		Total offering costs
$1.5 Billion Unit Offering	$	1,500,000			$	939,340	$	6,014	75	%	$	1,989	$	8,003	$	88,498	$	96,501
mShares Offering	500,000				73,835		2,782		74	%	985		3,767		2,909		6,676
2016 Shelf Offering	300,000		(3	)	98,080		2,062		100	%	—		2,062		3,001		5,063
2019 Shelf Offering	400,000		(2	)	—		—		—	%	710		710		—		710
Total	$	2,700,000			$	1,111,255	$	10,858			$	3,684	$	14,542	$	94,408	$	108,950

⁽¹⁾ These offering costs specifically identifiable to Unit offering closing transactions, such as commissions, dealer manager fees, and other registration fees, are reflected as a reduction of stockholders' equity at the time of closing.

⁽²⁾ On April 25, 2019, the Company's 2019 Shelf Registration Statement was declared effective.

⁽³⁾ The $300 million 2016 Shelf Offering expired in second quarter 2019, and therefore all remaining deferred offering costs were reclassified as reductions of stockholder's equity.

Aggregate offering expenses of the $1.5 Billion Unit Offering, including selling commissions and dealer manager fees, and of the mShares Offering, including dealer manager fees, are each individually capped at 11.5% of the aggregate gross proceeds of the two offerings, of which the Company will reimburse its Manager up to 1.5% of the gross proceeds of such offerings for all organization and offering expenses incurred, excluding selling commissions and dealer manager fees for the $1.5 Billion Unit Offering and excluding dealer manager fees for the mShares Offering; however, upon approval by the conflicts committee of the board of directors, the Company may reimburse its Manager for any such expenses incurred above the 1.5% amount as permitted by the Financial Industry Regulatory Authority, or FINRA.

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Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

In addition to property management fees, the Company incurred the following reimbursable on-site personnel salary and related benefits expenses at the properties, which are listed on the Consolidated Statements of Operations:

(in thousands)
Three-month periods ended June 30,				Six-month periods ended June 30,
2019		2018		2019		2018
$	4,213	$	3,930	$	8,292	$	7,539

(In thousands)		Three-month periods ended June 30,				Six-month periods ended June 30,
Type of Compensation	Basis of Compensation	2019		2018		2019		2018
Acquisition fees	1.0% of the gross purchase price of real estate assets	$	1,203	$	2,861	$	2,603	$	4,620
Loan origination fees	1.0% of the maximum commitment of any real estate loan, note or line of credit receivable	125		411		526		1,211
Loan coordination fees	0.6% of any assumed, new or supplemental debt incurred in connection with an acquired property	621		814		965		1,554
Asset management fees	Monthly fee equal to one-twelfth of 0.50% of the total book value of assets, as adjusted	3,840		3,600		7,565		7,265
Property management fees	Monthly fee up to 4% of the monthly gross revenues of the properties managed	2,495		2,148		4,951		4,241
General and administrative expense fees	Monthly fee equal to 2% of the monthly gross revenues of the Company	1,581		1,535		3,067		2,968
Construction management fees	Quarterly fee for property renovation and takeover projects	78		142		136		273
Disposition fees	1% of the sale price of a real estate asset	16		—		16		435
		$	9,959	$	11,511	$	19,829	$	22,567

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Dividends Dividend characterization (Tables)

6 Months Ended

Jun. 30, 2019

Dividend characterization [Abstract]

dividends and distributions [Text Block]

Dividends and Distributions

The Company declares and pays monthly cash dividend distributions on its Series A Preferred Stock in the amount of $5.00 per share per month and beginning in March 2017, on its Series M Preferred Stock, on an escalating scale of $4.79 per month in year one, increasing to $6.25 per month in year eight and beyond. All preferred stock dividends are prorated for partial months at issuance as necessary. The Company declared aggregate quarterly cash dividends on its Common Stock of $0.5225 and $0.505 per share for the six-month periods ended June 30, 2019 and 2018, respectively. The holders of Class A OP Units of the Operating Partnership are entitled to equivalent distributions as the dividends declared on the Common Stock. At June 30, 2019, the Company had 874,937 Class A OP Units outstanding, which are exchangeable on a one-for-one basis for shares of Common Stock or the equivalent amount of cash.

The Company's dividend and distribution activity consisted of:

	Dividends and distributions declared
	For the six months ended June 30,
	2019		2018
(in thousands)
Series A Preferred Stock	$	51,240	$	39,737
mShares	1,841		704
Common Stock	22,776		19,906
Class A OP Units	458		540
Total	$	76,315	$	60,887

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Equity Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Equity Compensation [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The underlying valuation assumptions and results for the 2018 Class B OP Unit awards were:

Grant dates	1/2/2018
Stock price	$	20.19
Dividend yield	4.95		%
Expected volatility	25.70		%
Risk-free interest rate	2.71		%
Number of Units granted:
One year vesting period	171,988
Three year vesting period	84,099
	256,087
Calculated fair value per Unit	$	16.66
Total fair value of Units	$	4,266,409
Target market threshold increase	$	5,660,580

The expected dividend yield assumptions were derived from the Company’s closing prices of the Common Stock on the grant dates and the projected future quarterly dividend payments per share of $0.25 for the 2018 awards.

For the 2018 awards, the Company's own stock price history was utilized as the basis for deriving the expected volatility assumption.

The risk-free rate assumptions were obtained from the Federal Reserve yield table and were calculated as the interpolated rate between the 20 and 30 year yield percentages on U. S. Treasury securities on the grant date.

Since the Class B OP Units have no expiration date, a derived service period of one year was utilized, which equals the period of time from the grant date to the initial valuation date.

Restricted Stock Units

The Company, through its Operating Partnership, has granted restricted stock units, or RSUs, to certain employees of affiliates of the Company, as shown in the following table:

Grant date	1/2/2019			1/2/2018			1/3/2017
Service period	2019-2021			2018-2020			2017-2019
RSU activity:
Granted	27,760			20,720			26,900
Forfeited	(1,280		)	(3,920		)	(6,674		)
Units earned and converted into common stock	—			—			(14,154		)
RSUs outstanding at June 30, 2019	26,480			16,800			6,072
RSUs unearned but vested	—			5,627			—
RSUs unearned but not yet vested	26,480			11,173			6,072
RSUs outstanding at June 30, 2019	26,480			16,800			6,072
Fair value per RSU	$	10.77		$	16.66		$	11.92
Total fair value of RSU grant	$	298,975		$	345,195		$	320,648

The RSUs vest in three equal consecutive one-year tranches from the date of grant. For each grant, on the Initial Valuation Date, the market capitalization of the number of shares of Common Stock at the date of grant is compared to the market capitalization of the same number of shares of Common Stock at the Initial Valuation Date. If the market capitalization measure results in an increase which exceeds the target market threshold, the Vested RSUs become earned RSUs and automatically convert into Common Stock on a one-to-one basis. Vested RSUs may become Earned RSUs on a pro-rata basis should the result of the market capitalization test be an increase of less than the target market threshold. Any Vested RSUs that do not become Earned RSUs on the Initial Valuation Date are subsequently remeasured on a quarterly basis until such time as all Vested RSUs become Earned RSUs or are forfeited due to termination of continuous service due to an event other than as a result of a qualified event, which is generally the death or disability of the holder. Continuous service through the final valuation date is required for the Vested RSUs to qualify to become fully Earned RSUs.

Because RSUs are valued using the identical market condition vesting requirement that determines the transition of the Vested Class B Units to Earned Class B Units, the same valuation assumptions per RSU were utilized to calculate the total fair values of the RSUs. The total fair value amounts pertaining to grants of RSUs, net of forfeitures, are amortized as compensation expense over the three one-year periods ending on the three successive anniversaries of the grant dates.

equity compensation expense [Table Text Block]

Equity compensation expense by award type for the Company was:

	Three-month period ended June 30,				Six-month period ended June 30,				Unamortized expense as of June 30,
(in thousands)	2019		2018		2019		2018		2019
Class B Unit awards:
2016	$	—	$	74	$	2	148		$	—
2017	78		88		156		195		159
2018	71		648		143		1,464		430
Restricted stock grants:
2017	—		30		—		120		—
2018	30		60		120		60		—
2019	70		—		70		—		350
Restricted stock units:
2017	20		22		38		43		36
2018	21		28		40		55		139
2019	16		—		48		—		238
Total	$	306	$	950	$	617	$	2,085	$	1,352

ClassBUnitGrantsvaluationassumptions [Table Text Block]

The underlying valuation assumptions and results for the 2018 Class B OP Unit awards were:

Grant dates	1/2/2018
Stock price	$	20.19
Dividend yield	4.95		%
Expected volatility	25.70		%
Risk-free interest rate	2.71		%
Number of Units granted:
One year vesting period	171,988
Three year vesting period	84,099
	256,087
Calculated fair value per Unit	$	16.66
Total fair value of Units	$	4,266,409
Target market threshold increase	$	5,660,580

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

Grant date	1/2/2019			1/2/2018			1/3/2017
Service period	2019-2021			2018-2020			2017-2019
RSU activity:
Granted	27,760			20,720			26,900
Forfeited	(1,280		)	(3,920		)	(6,674		)
Units earned and converted into common stock	—			—			(14,154		)
RSUs outstanding at June 30, 2019	26,480			16,800			6,072
RSUs unearned but vested	—			5,627			—
RSUs unearned but not yet vested	26,480			11,173			6,072
RSUs outstanding at June 30, 2019	26,480			16,800			6,072
Fair value per RSU	$	10.77		$	16.66		$	11.92
Total fair value of RSU grant	$	298,975		$	345,195		$	320,648

Restricted Stock Grants

The following annual grants of restricted stock were made to members of the Company's independent directors, as payment of the annual retainer fees. The restricted stock grants vested (or are scheduled to vest) on a pro-rata basis over the four consecutive 90-day periods following the date of grant.

Service year	Shares	Fair value per share		Total compensation cost (in thousands)
2017	24,408	$	14.75	$	360
2018	24,810	$	14.51	$	360
2019	26,446	$	15.88	$	420

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Equity Compensation RSUs (Tables)

6 Months Ended

Jun. 30, 2019

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

Grant date	1/2/2019			1/2/2018			1/3/2017
Service period	2019-2021			2018-2020			2017-2019
RSU activity:
Granted	27,760			20,720			26,900
Forfeited	(1,280		)	(3,920		)	(6,674		)
Units earned and converted into common stock	—			—			(14,154		)
RSUs outstanding at June 30, 2019	26,480			16,800			6,072
RSUs unearned but vested	—			5,627			—
RSUs unearned but not yet vested	26,480			11,173			6,072
RSUs outstanding at June 30, 2019	26,480			16,800			6,072
Fair value per RSU	$	10.77		$	16.66		$	11.92
Total fair value of RSU grant	$	298,975		$	345,195		$	320,648

Restricted Stock Grants

The following annual grants of restricted stock were made to members of the Company's independent directors, as payment of the annual retainer fees. The restricted stock grants vested (or are scheduled to vest) on a pro-rata basis over the four consecutive 90-day periods following the date of grant.

Service year	Shares	Fair value per share		Total compensation cost (in thousands)
2017	24,408	$	14.75	$	360
2018	24,810	$	14.51	$	360
2019	26,446	$	15.88	$	420

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Indebtedness (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

he following table summarizes our mortgage notes payable at June 30, 2019:

(dollars in thousands)
Fixed rate mortgage debt:	Principal balances due			Weighted-average interest rate		Weighted average remaining life (years)
Multifamily communities	$	1,032,344		3.92	%	9.4
New Market Properties	552,606			3.93	%	7.6
Preferred Office Properties	484,773			4.32	%	14.6
Student housing properties	160,324			4.13	%	6.1
Total fixed rate mortgage debt	2,230,047			4.02	%	9.9
Variable rate mortgage debt:
Multifamily communities	80,482			4.29	%	4.4
New Market Properties	27,400			5.44	%	2.4
Preferred Office Properties	—			—		—
Student housing properties	131,916			5.98	%	1.1
Total variable rate mortgage debt	239,798			5.35	%	2.4
Total mortgage debt:
Multifamily communities	1,112,826			3.94	%	9.1
New Market Properties	580,006			4.01	%	7.4
Preferred Office Properties	484,773			4.32	%	14.6
Student housing properties	292,240			4.97	%	3.9
Total principal amount	2,469,845			4.15	%	9.1
Deferred loan costs	(35,849		)
Mark to market loan adjustment	(4,754		)
Mortgage notes payable, net	$	2,429,242

Mortgage Financing of Property Acquisitions

The Company partially financed the real estate properties acquired during the six-month period ended June 30, 2019 with mortgage debt as shown in the following table:

Property	Date	Initial principal amount (in thousands)		Fixed/Variable rate	Rate		Maturity date
Disston Plaza	6/12/2019	$	18,038	Fixed	3.93	%	7/1/2034
Polo Grounds Mall	6/12/2019	13,325		Fixed	3.93	%	7/1/2034
Free State Shopping Center	5/28/2019	46,800		Fixed	3.99	%	6/1/2029
Haven49 (1)	3/27/2019	41,550		Variable	6.15	%	12/22/2019
Gayton Crossing	1/17/2019	18,000		Fixed	4.71	%	2/1/2029
		$	137,713

⁽¹⁾ The Company assumed the existing construction loan on this property.

debt covenant [Table Text Block]

As of June 30, 2019, the Company was in compliance with all covenants related to the Revolving Line of Credit, as shown in the following table:

Covenant (1)	Requirement		Result
Net worth	Minimum $1.7 billion	(2)	$1.8 billion
Debt yield	Minimum 8.25%		10.24%
Payout ratio	Maximum 95%	(3)	90.8%
Total leverage ratio	Maximum 65%		56.7%
Debt service coverage ratio	Minimum 1.50x		1.84x

⁽¹⁾ All covenants are as defined in the credit agreement for the Revolving Line of Credit.

⁽²⁾ Minimum of $686.9 million plus 75% of the net proceeds of any equity offering, which totaled approximately $1.0 billion as of June 30, 2019.

⁽³⁾ Calculated on a trailing four-quarter basis. For the twelve-month period ended June 30, 2019, the maximum dividends and distributions allowed under this covenant was approximately $151.0 million.

mortgage interest [Table Text Block]

c

Schedule of Maturities of Long-term Debt [Table Text Block]

of June 30, 2019 were:

Period	Future principal payments (in thousands)
2019	$	119,237
2020	73,063
2021	179,341
2022	219,111
2023	194,072
thereafter	1,685,021
Total	$	2,469,845

Schedule of Debt [Table Text Block]

Interest expense, including amortization of deferred loan costs was:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Multifamily communities	$	11,817	$	11,252	$	23,272	$	22,188
New Market Properties	6,115		4,629		11,701		8,985
Preferred Office Properties	5,357		2,666		10,708		5,207
Student housing properties	4,004		2,384		7,349		4,075
Interest paid to real estate loan participants	—		557		110		944
Total	27,293		21,488		53,140		41,399
Credit Facility and Acquisition Facility	318		859		1,227		1,916
Interest Expense	$	27,611	$	22,347	$	54,367	$	43,315

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Segment information (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting Information [Line Items]

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

Total revenues by reportable segment of the Company were:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Revenues
Rental revenues:
Multifamily communities	$	40,848	$	38,896	$	81,162	$	77,758
Student housing properties	11,433		7,097		21,457		12,766
New Market Properties	22,346		17,567		43,875		34,906
Preferred Office Properties (1)	20,965		12,992		41,336		25,384
Total rental revenues	95,592		76,552		187,830		150,814
Other revenues:
Multifamily communities	1,345		1,436		2,640		2,729
Student housing properties	210		107		404		190
New Market Properties	536		645		1,066		1,221
Preferred Office Properties	1,883		118		2,454		206
Total other revenues	3,974		2,306		6,564		4,346
Financing revenues	13,263		17,531		29,941		31,599
Miscellaneous revenues	1,023		—		1,023		—
Consolidated revenues	$	113,852	$	96,389	$	225,358	$	186,759
(1) Included in rental revenues for our Preferred Office Properties segment is the amortization of deferred revenue for tenant-funded leasehold improvements from a major tenant in our Three Ravinia and Westridge office buildings. As of June 30, 2019, the Company has deferred revenue in an aggregate amount of $47.0 million in connection with such improvements. The remaining balance to be recognized is approximately $41.6 million which is included in the deferred revenues line on the consolidated balance sheets at June 30, 2019. These total costs will be amortized over the lesser of the useful lives of the improvements or the individual lease terms. The Company recorded non-cash revenue of approximately $1.9 million and $1.1 million for the six-month periods ended June 30, 2019 and 2018, respectively.

Segment Reporting Disclosure [Text Block]

Segment Information

The Company's Chief Operating Decision Maker, or CODM, evaluates the performance of the Company's business operations and allocates financial and other resources by assessing the financial results and outlook for future performance across five distinct segments: multifamily communities, student housing properties, real estate related financing, New Market Properties and Preferred Office Properties.

Multifamily Communities - consists of the Company's portfolio of owned residential multifamily communities

Student Housing Properties - consists of the Company's portfolio of owned student housing properties.

Financing - consists of the Company's portfolio of real estate loans, bridge loans, and other instruments deployed by the Company to partially finance the development, construction, and prestabilization carrying costs of new multifamily communities and other real estate and real estate related assets. Excluded from the financing segment are consolidated assets of VIEs and financial results of the Company's Dawson Marketplace grocery-anchored shopping center real estate loan, which are included in the New Market Properties segment.

New Market Properties - consists of the Company's portfolio of grocery-anchored shopping centers, which are owned by New Market Properties, LLC, a wholly-owned subsidiary of the Company, as well as the financial results from the Company's grocery-anchored shopping center real estate loans.

Preferred Office Properties - consists of the Company's portfolio of office buildings.

The CODM monitors net operating income (“NOI”) on a segment and a consolidated basis as a key performance measure for its operating segments. NOI is defined as rental and other property revenue from real estate assets plus interest income from its loan portfolio less total property operating and maintenance expenses, property management fees, real estate taxes, property insurance, and general and administrative expenses. The CODM uses NOI as a measure of operating performance because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs, acquisition expenses, and other expenses generally incurred at the corporate level.  

The following tables present the Company's assets, revenues, and NOI results by reportable segment, as well as a reconciliation from NOI to net income (loss). The assets attributable to 'Other' primarily consist of  deferred offering costs recorded but not yet reclassified as reductions of stockholders' equity and cash balances at the Company and Operating Partnership levels.

(in thousands)	June 30, 2019		December 31, 2018
Assets:
Multifamily communities	$	1,480,775	$	1,503,648
Student housing properties	496,021		411,102
Financing	497,055		448,617
New Market Properties	1,026,418		883,594
Preferred Office Properties	878,848		884,648
Other (1)	601,401		279,349
Consolidated assets	$	4,980,518	$	4,410,958
(1) Other Assets includes $571,999 and $264,886 of assets owned by other pool participants within the Freddie Mac K Program that were consolidated by the Company. The Company's maximum exposure to loss from the combined mortgage pools from the Freddie Mac K Program is approximately $24.1 million.

Total capitalized expenditures (inclusive of additions to construction in progress, but exclusive of the purchase price of acquisitions) for the three-month and six-month periods ended June 30, 2019 and 2018 were as follows:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Capitalized expenditures:
Multifamily communities	$	3,633	$	5,859	$	4,845	$	10,698
Student housing properties	910		927		1,823		1,208
New Market Properties	1,427		1,002		3,004		1,787
Total	$	5,970	$	7,788	$	9,672	$	13,693

Second-generation capital expenditures exclude those expenditures made in our office building portfolio (i) to lease space to "first generation" tenants (i.e. leasing capital for existing vacancies and known move-outs at the time of acquisition), (ii) to bring recently acquired properties up to our Class A ownership standards (and which amounts were underwritten into the total investment at the time of acquisition), (iii) for property redevelopments and repositionings (iv) to newly leased space which had been vacant for more than one year and (v) for building improvements that are recoverable from future operating cost savings.

Total revenues by reportable segment of the Company were:

	Three-month periods ended June 30,				Six-month periods ended June 30,
(in thousands)	2019		2018		2019		2018
Revenues
Rental revenues:
Multifamily communities	$	40,848	$	38,896	$	81,162	$	77,758
Student housing properties	11,433		7,097		21,457		12,766
New Market Properties	22,346		17,567		43,875		34,906
Preferred Office Properties (1)	20,965		12,992		41,336		25,384
Total rental revenues	95,592		76,552		187,830		150,814
Other revenues:
Multifamily communities	1,345		1,436		2,640		2,729
Student housing properties	210		107		404		190
New Market Properties	536		645		1,066		1,221
Preferred Office Properties	1,883		118		2,454		206
Total other revenues	3,974		2,306		6,564		4,346
Financing revenues	13,263		17,531		29,941		31,599
Miscellaneous revenues	1,023		—		1,023		—
Consolidated revenues	$	113,852	$	96,389	$	225,358	$	186,759
(1) Included in rental revenues for our Preferred Office Properties segment is the amortization of deferred revenue for tenant-funded leasehold improvements from a major tenant in our Three Ravinia and Westridge office buildings. As of June 30, 2019, the Company has deferred revenue in an aggregate amount of $47.0 million in connection with such improvements. The remaining balance to be recognized is approximately $41.6 million which is included in the deferred revenues line on the consolidated balance sheets at June 30, 2019. These total costs will be amortized over the lesser of the useful lives of the improvements or the individual lease terms. The Company recorded non-cash revenue of approximately $1.9 million and $1.1 million for the six-month periods ended June 30, 2019 and 2018, respectively.

	Three-month periods ended June 30,						Six-month periods ended June 30,
(in thousands)	2019			2018			2019			2018
Segment net operating income (Segment NOI)
Multifamily communities	$	24,146		$	22,745		$	48,390		$	46,268
Student housing properties	7,150			3,905			12,241			6,941
Financing	13,286			17,531			29,965			31,599
New Market Properties	16,425			12,812			32,230			25,485
Preferred Office Properties	16,515			9,334			31,320			18,397
Consolidated segment net operating income	77,522			66,327			154,146			128,690
Interest expense:
Multifamily communities	11,816			11,252			23,272			22,188
Student housing properties	4,005			2,384			7,349			4,075
New Market Properties	6,115			4,630			11,701			8,985
Preferred Office Properties	5,357			2,666			10,708			5,207
Financing	318			1,415			1,337			2,860
Depreciation and amortization:
Multifamily communities	18,391			20,320			38,802			42,023
Student housing properties	6,179			7,496			11,633			12,601
New Market Properties	10,632			9,177			20,967			18,057
Preferred Office Properties	10,461			5,102			19,550			10,030
Professional fees	888			769			1,773			1,243
Management fees, net of forfeitures	5,414			5,192			10,614			10,213
Loan loss allowance	—			—			—			—
Equity compensation to directors and executives	306			950			617			2,085
Gain on sale of real estate	—			(2		)	—			(20,356		)
Gain on noncash net assets of consolidated VIEs	(584		)	(54		)	(725		)	(54		)
Gain loss on sale of real estate loan investment	(747		)	—			(747		)	—
Loss on extinguishment of debt	52			—			69			—
Gain on trading investment, net	—			—			(4		)	—
Other	596			308			1,187			548
Net income (loss)	$	(1,677	)	$	(5,278	)	$	(3,957	)	$	8,985

segment assets [Table Text Block]

(in thousands)	June 30, 2019		December 31, 2018
Assets:
Multifamily communities	$	1,480,775	$	1,503,648
Student housing properties	496,021		411,102
Financing	497,055		448,617
New Market Properties	1,026,418		883,594
Preferred Office Properties	878,848		884,648
Other (1)	601,401		279,349
Consolidated assets	$	4,980,518	$	4,410,958
(1) Other Assets includes $571,999 and $264,886 of assets owned by other pool participants within the Freddie Mac K Program that were consolidated by the Company. The Company's maximum exposure to loss from the combined mortgage pools from the Freddie Mac K Program is approximately $24.1 million.

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three-month periods ended June 30,						Six-month periods ended June 30,
(in thousands)	2019			2018			2019			2018
Segment net operating income (Segment NOI)
Multifamily communities	$	24,146		$	22,745		$	48,390		$	46,268
Student housing properties	7,150			3,905			12,241			6,941
Financing	13,286			17,531			29,965			31,599
New Market Properties	16,425			12,812			32,230			25,485
Preferred Office Properties	16,515			9,334			31,320			18,397
Consolidated segment net operating income	77,522			66,327			154,146			128,690
Interest expense:
Multifamily communities	11,816			11,252			23,272			22,188
Student housing properties	4,005			2,384			7,349			4,075
New Market Properties	6,115			4,630			11,701			8,985
Preferred Office Properties	5,357			2,666			10,708			5,207
Financing	318			1,415			1,337			2,860
Depreciation and amortization:
Multifamily communities	18,391			20,320			38,802			42,023
Student housing properties	6,179			7,496			11,633			12,601
New Market Properties	10,632			9,177			20,967			18,057
Preferred Office Properties	10,461			5,102			19,550			10,030
Professional fees	888			769			1,773			1,243
Management fees, net of forfeitures	5,414			5,192			10,614			10,213
Loan loss allowance	—			—			—			—
Equity compensation to directors and executives	306			950			617			2,085
Gain on sale of real estate	—			(2		)	—			(20,356		)
Gain on noncash net assets of consolidated VIEs	(584		)	(54		)	(725		)	(54		)
Gain loss on sale of real estate loan investment	(747		)	—			(747		)	—
Loss on extinguishment of debt	52			—			69			—
Gain on trading investment, net	—			—			(4		)	—
Other	596			308			1,187			548
Net income (loss)	$	(1,677	)	$	(5,278	)	$	(3,957	)	$	8,985

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Loss per Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]

earnings loss per share [Table Text Block]

		Three-month periods ended June 30,						Six-month periods ended June 30,
	(in thousands, except per-share figures)	2019			2018			2019			2018
Numerator:
	Operating income before gains on sales of real estate and trading investment	$	24,655		$	17,013		$	49,003		$	31,890
	Gains on sales of real estate and trading investment	—			2			4			20,356
	Operating income	24,655			17,015			49,007			52,246
	Interest expense	27,611			22,347			54,367			43,315
	Change in fair value of net assets of consolidated VIEs from mortgage-backed pools	584			54			725			54
	Loss on extinguishment of debt	(52		)	—			(69		)	—
	Gain on sale of real estate loan investment	747			—			747			—
	Net (loss) income	(1,677		)	(5,278		)	(3,957		)	8,985
	Consolidated net loss (income) attributable to non-controlling interests	571			140			79			(240		)
	Net (loss) income attributable to the Company	(1,106		)	(5,138		)	(3,878		)	8,745
	Dividends declared to preferred stockholders	(27,542		)	(20,924		)	(53,081		)	(40,441		)
	Earnings attributable to unvested restricted stock	(7		)	(6		)	(9		)	(8		)
	Net loss attributable to common stockholders	$	(28,655	)	$	(26,068	)	$	(56,968	)	$	(31,704	)
Denominator:
	Weighted average number of shares of Common Stock - basic	43,703			39,383			43,194			39,241
	Effect of dilutive securities: (D)	—			—			—			—
	Weighted average number of shares of Common Stock - basic and diluted	43,703			39,383			43,194			39,241
	Net loss per share of Common Stock attributable to
	common stockholders, basic and diluted	$	(0.66	)	$	(0.66	)	$	(1.32	)	$	(0.81	)

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Fair Values of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Fair Values of Financial Instruments [Abstract]

Fair Value Measurements, Nonrecurring [Table Text Block]

	As of June 30, 2019
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Real estate loans	$	360,180	$	392,279	$	—	$	—	$	392,279
Notes receivable and line of credit receivable	45,143		45,143		—		—		45,143
	$	405,323	$	437,422	$	—	$	—	$	437,422
Financial Liabilities:
Mortgage notes payable	$	2,469,845	$	2,522,323	$	—	$	—	$	2,522,323

	As of December 31, 2018
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Real estate loans (1)	$	334,211	$	366,328	$	—	$	—	$	366,328
Notes receivable and line of credit receivable	47,307		47,307		—		—		47,307
	$	381,518	$	413,635	$	—	$	—	$	413,635
Financial Liabilities:
Mortgage notes payable	$	2,339,752	2,313,405		$	—	$	—	$	2,313,405
Revolving credit facility	57,000		57,000		—		—		57,000
Loan participation obligations	5,181		5,181		—		—		5,181
	$	2,401,933	$	2,375,586	$	—	$	—	$	2,375,586

⁽¹⁾ The carrying value of real estate assets at December 31, 2018 included the Company's balance of the Palisades real estate loan investment, which included the amounts funded by an unrelated participant. On March 13, 2019, the Company repurchased the loan participant's 25% balance in the loan from the loan participant and at June 30, 2019, carried the entire loan balance on its consolidated balance sheet without reflection of any liability to any third party.

The fair value of the real estate loans within the level 3 hierarchy are comprised of estimates of the fair value of the notes, which were developed utilizing a discounted cash flow model over the remaining terms of the notes until their maturity dates and utilizing discount rates believed to approximate the market risk factor for notes of similar type and duration. The fair values also contain a separately-calculated estimate of any applicable additional interest payment due the Company at the maturity date of the loan, based on the outstanding loan balances at June 30, 2019, discounted to the reporting date utilizing a discount rate believed to be appropriate for multifamily development projects.

The fair values of the fixed rate mortgages on the Company’s properties were developed using market quotes of the fixed rate yield index and spread for 4, 5, 6, 7, 10, 15, 25 and 35 year notes as of the reporting date. The present values of the cash flows were calculated using the original interest rate in place on the fixed rate mortgages and again at the current market rate. The difference between the two results was applied as a fair market adjustment to the carrying value of the mortgages.

The following table presents activity of the two mortgage pools from the Freddie Mac K Programas of and for the six-month period ended June 30, 2019:

	Assets			Liabilities
(in thousands)	Multifamily mortgage loans held in VIEs at fair value			VIE liabilities, at fair value			Net
Balance as of December 31, 2018	$	269,946		$	264,886		$	5,060
Initial consolidation of ML-05 trust:	289,325			270,670			18,655
Gains (losses) included in net income due to change in fair value of net assets of VIE:	38,931			38,516			415
Repayments of underlying mortgage principal amounts and repayments to Class A holders:	(2,073		)	(2,073		)	—
Balance as of June 30, 2019	$	596,129		$	571,999		$	24,130

The changes in the fair value of the net assets of consolidated VIEs from mortgage-backed pools were:

	Three months ended				Six months ended
	June 30,				June 30,
(in thousands)	2019		2018		2019		2018
Interest earned	$	310	$	—	$	310	$	—
Unrealized gain	274		54		415		54
Change in fair value of net assets of consolidated VIEs from mortgage-backed pools	$	584	$	54	$	725	$	54

The following table presents the level 3 input used to calculate the fair value of the consolidated assets and liabilities of the two VIEs:

(in thousands)	Fair value		Valuation methodology	Unobservable input
Assets:
Multifamily mortgage loans held in VIEs at fair value	$	596,129	Discounted cash flow	Discount rate	3.9	%
Liabilities:
VIE liabilities, at fair value	$	571,999	Discounted cash flow	Discount rate	3.9	%

The following tables present the estimated fair values of the consolidated assets and liabilities from the two VIEs for which the Company has elected the fair value option.

	As of June 30, 2019
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
VIE assets from mortgage-backed pools	$	596,129	$	596,129	$	—	$	—	$	596,129
Financial Liabilities:
VIE liabilities from mortgage-backed pools	$	571,999	$	571,999	$	—	$	—	$	571,999

	December 31, 2018
	Carrying value				Fair value measurements using fair value hierarchy
(in thousands)			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
VIE assets from mortgage-backed pools	$	269,946	$	269,946	$	—	$	—	$	269,946
Financial Liabilities:
VIE liabilities from mortgage-backed pools	$	264,886	$	264,886	$	—	$	—	$	264,886

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Operating Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

For the year ending December 31:	Future Minimum Rents as of June 30, 2019
(in thousands)	New Market Properties		Preferred Office Properties		Total
2019 (1)	$	33,871	$	28,476	$	62,347
2020	64,188		62,266		126,454
2021	55,988		61,347		117,335
2022	46,983		61,171		108,154
2023	40,038		60,378		100,416
Thereafter	118,010		306,324		424,334
Total	$	359,078	$	579,962	$	939,040
(1) Remaining six months

For the year ending December 31:	Future Minimum Rents as of December 31, 2018
(in thousands)	New Market Properties		Preferred Office Properties		Total
2019	$	58,143	$	56,564	$	114,707
2020	51,949		61,704		113,653
2021	43,152		58,805		101,957
2022	35,218		58,108		93,326
2023	29,562		57,343		86,905
Thereafter	79,747		298,469		378,216
Total	$	297,771	$	590,993	$	888,764

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Organization (Details)	Jun. 30, 2019 $ / shares shares	Dec. 31, 2018 $ / shares shares
Class of Stock [Line Items]
Common Stock, Par or Stated Value Per Share | $ / shares	$ 0.01
Common Stock, Shares, Outstanding	44,246,703
Noncontrolling Interest, Ownership Percentage by Parent	98.10%
minority interest partnership units outstanding	874,937
daycountvolweightedavgcalcformarketvalue	20
Common Stock [Member]
Class of Stock [Line Items]
Common Stock, Par or Stated Value Per Share | $ / shares	$ 0.01	$ 0.01
Common Stock, Shares, Outstanding	43,238,000	41,776,000

XML

Significant Accounting Policies (Details) - shares	Jun. 30, 2019	Dec. 31, 2018
Series M Preferred Stock [Member]
Real Estate Properties [Line Items]
preferred stock	74,000	44,000
Series A Preferred Stock [Member]
Real Estate Properties [Line Items]
preferred stock	1,929,000	1,674,000

XML

Real Estate Assets - Narrative (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($) ft²	Jun. 30, 2019 ft²	Jun. 30, 2019	Sep. 30, 2018 USD ($)
Business Acquisition
purchase option termination fees received			$ 7,900,000
unearned revenue from purchase option termination fees	$ 5,893,000		5,893,000		$ 2,050,000
Intangible Assets, Gross (Excluding Goodwill)								$ 270,400,000
Number of units in real estate property					9,768	575	9,768
Area of Real Estate Property | ft²					4,730,695	5,412,328
Revenues	113,852,000	$ 96,389,000	225,358,000	$ 186,759,000
Net Income contributed to consolidated results	(1,677,000)	(5,278,000)	(3,957,000)	8,985,000
Gains (Losses) on Sales of Investment Real Estate	0	2,000	4,000	20,356,000
Income (Loss) before Gain (Loss) on Sale of Properties	24,655,000	17,013,000	49,003,000	31,890,000
Finite-Lived Intangible Assets, Accumulated Amortization	122,735,000		122,735,000		$ 113,199,000			$ 131,900,000
Finite-Lived Intangible Liabilities			71,400,000
finite lived intangible liabilities accumulated amortization			19,600,000
amortization of purchase option termination fee income	$ 1,383,000	2,470,000	5,617,000	$ 2,470,000	$ 2,300,000
amortization of purchase option termination fee income net		$ 3,300,000
Retail Site [Member]
Business Acquisition
Number of Real Estate Properties					45		49
armour yards [Domain]
Business Acquisition
Net assets acquired			66,500,000
Business Combination, Consideration Transferred			61,364,000
armour yards [Domain]
Business Acquisition
Net Rentable Area | ft²						187,000
Lake Cameron [Member]
Business Acquisition
Number of units in real estate property							328
Net assets acquired			43,500,000
Gains (Losses) on Sales of Investment Real Estate			20,400,000
Income (Loss) before Gain (Loss) on Sale of Properties			$ 200,000

XML

Real Estate Assets - Table of Properties Acquired (Details)	6 Months Ended	9 Months Ended
	Jun. 30, 2019 USD ($)	Sep. 30, 2018 ft²	Jun. 30, 2019 ft²	Jun. 30, 2019	Dec. 31, 2018 USD ($) ft²
Business Acquisition
Number of units in real estate property			575	9,768	9,768
Area of Real Estate Property | ft²			5,412,328		4,730,695
Restricted Cash and Cash Equivalents	$ 50,478,000				$ 48,732,000
Multifamily Acquisitions [Member]
Business Acquisition
Finite-lived Intangible Assets Acquired	4,306,000
business combinations, accrued property tax liability	166,000
Other liabilities	(183,000)
Business Combination, Consideration Transferred	108,702,000
Cash paid	37,427,000
business combination purchase price	106,500,000
Finite-Lived Intangible Assets, Remaining Amortization Period		0 months
Luxe Sorrel II [Member]
Business Acquisition
Number of units in real estate property | ft²			265
Luxe Sorrel II [Member]
Business Acquisition
Land	6,756,000
Buildings and improvements	48,332,000
Business Combination, Consideration Transferred	61,364,000
Cash paid	21,364,000
business combination purchase price	$ 66,500,000
Green Park [Member]
Business Acquisition
Number of units in real estate property | ft²			310
Lenox Portfolio [Member]
Business Acquisition
Net Rentable Area | ft²		47,600
Luxe Sorrel II [Member]
Business Acquisition
Net Rentable Area | ft²			187,000

XML

Real Estate Assets - Purchase Price Allocation (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2018
Business Acquisition
Land	$ 571,776,000		$ 571,776,000			$ 519,300,000
Less: accumulated depreciation	(344,702,000)		(344,702,000)			(272,042,000)
Building and improvements	2,902,740,000		2,902,740,000			2,738,085,000
Furniture, fixtures, and equipment	298,891,000		298,891,000			278,151,000
Construction in progress	9,418,000		9,418,000			8,265,000
Real Estate Investment Property, at Cost	3,924,164,000		3,924,164,000			3,672,715,000
Tenant Improvements	141,339,000		141,339,000			$ 128,914,000
Revenues	113,852,000	$ 96,389,000	225,358,000	$ 186,759,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(1,677,000)	(5,278,000)	(3,957,000)	8,985,000
acquisition fees paid to related party for woodstock			2,467,000	2,105,000
Student Housing Properties [Member] [Domain]
Business Acquisition
Land	7,289,000		7,289,000
Buildings and improvements	68,163,000		68,163,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	0		0
business combinations, accrued property tax liability	(158,000)		(158,000)
Business Combination, Consideration Transferred			90,664,000
Payments to Acquire Businesses, Gross			46,397,000
Business Combination, Consideration Transferred, Liabilities Incurred			41,550,000
Revenues			1,534,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest			(1,653,000)
Other liabilities	(2,579,000)		(2,579,000)
capitalized acquisition costs asset acquisition			$ 1,016,000	2,555,000
Finite-Lived Intangible Assets, Remaining Amortization Period			6 months
Prepaid Expenses and Other Current Assets [Member]
Business Acquisition
Amortization			$ 0
Furniture and Fixtures [Member]
Business Acquisition
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	16,966,000		16,966,000
Multifamily Acquisitions [Member]
Business Acquisition
Land	12,810,000		12,810,000
Building and improvements	73,773,000		73,773,000
Furniture, fixtures, and equipment	17,969,000		17,969,000
business combinations, accrued property tax liability	(166,000)		(166,000)
Business Combination, Consideration Transferred			108,702,000
Payments to Acquire Businesses, Gross			37,427,000
Revenues	2,567,000		5,124,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(1,032,000)		(2,332,000)
Other liabilities	(183,000)		(183,000)
capitalized acquisition costs asset acquisition			2,347,000
Finite-Lived Intangible Assets, Remaining Amortization Period					0 months
Amortization			4,306,000
business combination prepaids and other assets acquired		193,000		193,000
business combination debt financing			71,275,000
Business Acquisition, Transaction Costs	1,094,000		1,094,000
armour yards [Domain]
Business Acquisition
Land	6,756,000		6,756,000
Buildings and improvements	48,332,000		48,332,000
Business Combination, Consideration Transferred			61,364,000
Payments to Acquire Businesses, Gross			21,364,000
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed tenant improvements	6,201,000		6,201,000
Finite-Lived Intangible Asset, Acquired-in-Place Leases	3,762,000		3,762,000
above market lease intangibles	61,000		61,000
Other Finite-Lived Intangible Assets, Gross	2,181,000		2,181,000
Off-market Lease, Unfavorable	(1,594,000)		(1,594,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities	(4,335,000)		(4,335,000)
business combination debt financing			40,000,000
2018 acquisition [Domain]
Business Acquisition
Revenues			1,588,000	3,123,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest			2,000	(4,000)
Finite-Lived Intangible Assets, Remaining Amortization Period					7 years 1 month
Business Acquisition, Transaction Costs					$ 817,000
Acquisition costs paid to related party					$ 665,000
Q2 2018 NMP acquisitions [Domain]
Business Acquisition
Land	45,188,000	24,504,000	45,188,000	24,504,000
Buildings and improvements	89,680,000	50,086,000	89,680,000	50,086,000
Tenant Improvements	5,897,000	4,018,000	5,897,000	4,018,000
Business Combination, Consideration Transferred			151,445,000	84,622,000
Revenues	1,583,000	1,923,000	2,178,000	4,083,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(329,000)	(159,000)	(469,000)	(188,000)
capitalized acquisition costs asset acquisition			$ 2,921,000	1,221,000
Finite-Lived Intangible Assets, Remaining Amortization Period			8 years 9 months		5 years 11 months
Finite-Lived Intangible Asset, Acquired-in-Place Leases	13,111,000	6,177,000	$ 13,111,000	6,177,000
Other Finite-Lived Intangible Assets, Gross	5,097,000	2,011,000	5,097,000	2,011,000
Off-market Lease, Unfavorable	(9,066,000)	(2,765,000)	(9,066,000)	(2,765,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities	(604,000)	(792,000)	(604,000)	(792,000)
business combination debt financing			96,163,000	29,708,000
Business Acquisition, Transaction Costs	1,535,000	869,000	1,535,000	869,000
Finite-Lived Intangible Asset, Off-market Lease, Favorable, Gross	2,045,000	1,383,000	2,045,000	1,383,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	97,000	0	97,000	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	$ 151,445,000	$ 84,622,000	151,445,000	84,622,000
business combination cash paid			55,282,000	$ 54,914,000
Lease Intangibles [Member]
Business Acquisition
Amortization			$ 983,000

XML

Real Estate Assets - Depreciation and Amortization (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Sep. 30, 2018
Business Acquisition
Intangible Assets, Gross (Excluding Goodwill)						$ 270,400,000
finite lived intangible liabilities accumulated amortization			$ 19,600,000
Depreciation:
Depreciation	$ 36,722,000	$ 29,754,000	72,842,000	$ 57,744,000
Amortization:
Depreciation and amortization	45,663,000	42,095,000	90,952,000	82,711,000
Below Market Lease, Accumulated Amortization	17,280,000		17,280,000		$ 15,254,000
Furniture and Fixtures [Member]
Depreciation:
Depreciation	12,532,000	11,398,000	25,665,000	21,910,000
Building and Building Improvements [Member]
Depreciation:
Depreciation	24,190,000	18,356,000	47,177,000	35,834,000
Finite-Lived Intangible Assets [Member]
Amortization:
Amortization of Intangible Assets	8,617,000	12,209,000	17,563,000	24,709,000
Lease Agreements [Member]
Amortization:
Amortization of Deferred Leasing Fees	276,000	105,000	453,000	196,000
Website Development [Member]
Amortization:
amortization website development costs	$ 48,000	$ 27,000	$ 94,000	$ 62,000
Maximum [Member]
Business Acquisition
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			9 years 5 months
Minimum [Member]
Business Acquisition
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			7 years 11 months

XML

Real Estate Assets Contributions to revenue and net income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Business Combination, Separately Recognized Transactions [Line Items]
Revenues	$ 113,852	$ 96,389	$ 225,358	$ 186,759
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ (1,677)	$ (5,278)	$ (3,957)	$ 8,985

XML

Real Estate Assets Real estate assets owned (Details)	Jun. 30, 2019 ft²	Jun. 30, 2019	Dec. 31, 2018 ft²	Sep. 30, 2018 ft²
Business Combination Segment Allocation [Line Items]
Number of units in real estate property	575	9,768	9,768
Area of Real Estate Property	5,412,328		4,730,695
Area of Real Estate Property, Excluded from Floor Retail Space	2,578,000		2,578,000
Office Building [Member]
Business Combination Segment Allocation [Line Items]
Number of Real Estate Properties		7	7
Multifamily [Member]
Business Combination Segment Allocation [Line Items]
Number of Real Estate Properties		32	32
Retail Site [Member]
Business Combination Segment Allocation [Line Items]
Number of Real Estate Properties		49	45
student housing [Member]
Business Combination Segment Allocation [Line Items]
Number of Real Estate Properties		8	7
Number of units in real estate property		2,011	1,679
Number of beds, student housing		6,095	5,208
Lenox Portfolio [Member]
Business Combination Segment Allocation [Line Items]
Net Rentable Area				47,600

XML

Real Estate Assets Real estate sold (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 ft²	Jun. 30, 2019	Dec. 31, 2018 USD ($)
Property, Plant and Equipment [Line Items]
Number of units in real estate property					575	9,768	9,768
Land	$ 571,776,000		$ 571,776,000				$ 519,300,000
Investment Building and Building Improvements	2,902,740,000		2,902,740,000				2,738,085,000
Furniture, fixtures, and equipment	298,891,000		298,891,000				278,151,000
Real Estate Investment Property, Accumulated Depreciation	(344,702,000)		(344,702,000)				(272,042,000)
Assets	4,980,518,000		4,980,518,000				4,410,958,000
Liabilities	3,196,348,000		3,196,348,000				$ 2,801,573,000
Gains (Losses) on Sales of Investment Real Estate	0	$ 2,000	4,000	$ 20,356,000
Income (Loss) before Gain (Loss) on Sale of Properties	$ 24,655,000	$ 17,013,000	49,003,000	$ 31,890,000
Lake Cameron [Member]
Property, Plant and Equipment [Line Items]
Number of units in real estate property						328
business combination purchase price			43,500,000
Gains (Losses) on Sales of Investment Real Estate			20,400,000
Income (Loss) before Gain (Loss) on Sale of Properties			$ 200,000

XML

Real Estate Assets Real estate assets correction (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Investment Building and Building Improvements	$ 2,902,740,000	$ 2,738,085,000
Tenant Improvements	$ 141,339,000	$ 128,914,000

XML

Real Estate Assets purchase options (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
purchase option termination fees received			$ 7,900,000
amortization of purchase option termination fee income	$ 1,383,000	$ 2,470,000	$ 5,617,000	$ 2,470,000	$ 2,300,000

XML

Acquired Intangible Assets amortization (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Liabilities			$ 71,400
Revenues	$ 113,852	$ 96,389	225,358	$ 186,759
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ (1,677)	$ (5,278)	$ (3,957)	$ 8,985

XML

Real Estate Loans, Notes Receivable, and Lines of Credit Real Estate Loans (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
number of loans receivable	20		20		19
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate	$ 360,180,000		$ 360,180,000
real estate loans commitment amount			443,061,000
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount	362,000,000		362,000,000
variable interest entity loans amount to be funded	443,100,000		443,100,000
interest revenue current pay	7,479,000	$ 8,686,000	14,948,000	$ 17,191,000
Loans and Leases Receivable, Deferred Income	51,000		51,000		$ 152,000
Loans Receivable, Gross, Commercial, Real Estate	362,045,000		362,045,000		336,329,000
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums	(1,865,000)		(1,865,000)		(2,118,000)
Mortgage Loans on Real Estate, Commercial and Consumer, Net	360,180,000		360,180,000		334,211,000
Loans and Leases Receivable, Impaired, Commitment to Lend	81,017,000		81,017,000		164,913,000
real estate loans amount funded			53,497,000
Loans Settled With Acquisition			(27,781,000)
real estate loan origination fees collected			(526,000)
real estate loan fees amortized			$ 779,000
current interest rate			8.48%	8.47%
Deferred interest rate			4.02%	5.34%
Interest Receivable	24,406,000		$ 24,406,000		$ 23,340,000
purchase option termination fee receivable	7,900,000		7,900,000
total amounts due from borrowers	$ 394,351,000		$ 394,351,000
multifamily community [Domain]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
number of loans receivable	15		15
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate	$ 306,351,000		$ 306,351,000
real estate loans commitment amount			$ 370,563,000
real estate loans percent of portfolio	84.00%		84.00%
student housing community [Domain]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
number of loans receivable	3		3
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate	$ 37,851,000		$ 37,851,000
real estate loans commitment amount			$ 40,448,000
real estate loans percent of portfolio	11.00%		11.00%
Retail Segment [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
number of loans receivable	1		1
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate	$ 12,857,000		$ 12,857,000
real estate loans commitment amount			$ 12,857,000
real estate loans percent of portfolio	4.00%		4.00%
Preferred Office Properties [Domain]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
number of loans receivable	1		1
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate	$ 3,121,000		$ 3,121,000
real estate loans commitment amount			$ 19,193,000
real estate loans percent of portfolio	1.00%		1.00%
Rating Indicator A [Member] | Internal Investment Grade [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans Receivable, Gross, Commercial, Real Estate	$ 317,600,000		$ 317,600,000
Interest Receivable	20,688,000		20,688,000
purchase option termination fee receivable	7,900,000		7,900,000
total amounts due from borrowers	346,207,000		346,207,000
Rating Indicator B [Member] | Internal Investment Grade [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans Receivable, Gross, Commercial, Real Estate	38,300,000		38,300,000
Interest Receivable	2,510,000		2,510,000
purchase option termination fee receivable	0		0
total amounts due from borrowers	40,820,000		40,820,000
Rating Indicator C [Member] | Internal Investment Grade [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans Receivable, Gross, Commercial, Real Estate	6,100,000		6,100,000
Interest Receivable	1,208,000		1,208,000
purchase option termination fee receivable	0		0
total amounts due from borrowers	7,324,000		7,324,000
Rating Indicator D [Member] | Internal Investment Grade [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans Receivable, Gross, Commercial, Real Estate	0		0
Interest Receivable	0		0
purchase option termination fee receivable	0		0
total amounts due from borrowers	$ 0		$ 0

XML

Real Estate Loans, Notes Receivable, and Lines of Credit Notes and lines of credit (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018	Jan. 01, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
line of credit receivable	$ 45,143,000
Financing Receivable, Gross	57,310,000
Loans and Leases Receivable, Net Amount	45,142,000	$ 47,307,000
Loans and Leases Receivable, Deferred Income	(51,000)	$ (152,000)
360 Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
interest rate note receivable		12.00%	8.00%
PCMS [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Gross	1,500,000
Loans and Leases Receivable, Net Amount	$ 686,000	$ 763,000
interest rate note receivable	10.00%
PAA [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
line of credit receivable	$ 22,000,000
Loans and Leases Receivable, Net Amount	$ 16,842,000	9,778,000
interest rate note receivable	8.00%
HCC [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
line of credit receivable	$ 11,660,000
Loans and Leases Receivable, Net Amount	$ 8,374,000	11,620,000
interest rate note receivable	8.00%
Oxford Capital Partners LLC [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
line of credit receivable	$ 8,000,000
Loans and Leases Receivable, Net Amount	$ 6,589,000	4,022,000
interest rate note receivable	12.00%
newport development partners [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
line of credit receivable	$ 2,000,000
Loans and Leases Receivable, Net Amount	$ 1,529,000	0
interest rate note receivable	12.00%
Mulberry Development Group LLC [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
line of credit receivable	$ 750,000
Loans and Leases Receivable, Net Amount	$ 455,000	465,000
interest rate note receivable	12.00%
360 Capital Company - Due December 31, 2019 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
line of credit receivable	$ 3,400,000
Loans and Leases Receivable, Net Amount	$ 3,292,000	3,100,000
interest rate note receivable	12.00%
360 Capital Company - Due December 31, 2020 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
line of credit receivable	$ 8,000,000
Loans and Leases Receivable, Net Amount	$ 7,426,000	6,923,000
interest rate note receivable	8.50%
haven charlotte [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
line of credit receivable	$ 0
Loans and Leases Receivable, Net Amount	$ 0	$ 10,788,000
interest rate note receivable	15.00%

XML

Real Estate Loans, Notes Receivable, and Lines of Credit Interest income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Receivables [Abstract]
interest revenue current pay	$ 7,479	$ 8,686	$ 14,948	$ 17,191
Accrued exit fee revenue	3,184	5,469	6,569	10,195
Deferred Revenue, Revenue Recognized	465	607	780	1,038
amortization of purchase option termination fee income	1,383	2,470	5,617	2,470	$ 2,300
Net loan fee revenue	12,511	17,232	27,914	30,894
interest revenue notes receivable	925	800	2,414	1,703
Interest Income, Money Market Deposits	280	0	280	0
Interest Income, Securities, Mortgage Backed	9	0	207	0
Interest income on loans and notes receivable	$ 13,725	$ 18,032	$ 30,815	$ 32,597

XML

Real Estate Loans, Notes Receivable, and Lines of Credit Real Estate Loans Narrative (Details) - USD ($)				6 Months Ended
	Mar. 28, 2019	Mar. 27, 2019	Mar. 23, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Sep. 30, 2018
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
fee on sale of loan				$ 1,550,000
payments received from real estate loan participants				5,223,000	$ 3,664,000
real estate loan participation percentage							25.00%
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount				362,000,000
variable interest entity loans amount to be funded				443,100,000
real estate loan balances unfunded				81,000,000
Loans Receivable, Gross, Commercial, Real Estate				362,045,000		$ 336,329,000
Haven Campus Communities, LLC and Haven Campus Communities Charlotte Member, LLC [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Equity Method Investment, Ownership Percentage		49.49%
payments received from real estate loan participants		$ 3,300,000
Geographic Concentration Risk [Member] | Oxford [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
amount drawn under loan agreement				97,900,000
loan commitment amount				119,400,000
Mortgage Backed Securities, Other [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Monthly Interest Expense	$ 103,000
Payments to Acquire Investments	$ 18,400,000		$ 4,700,000
US Government Agencies Debt Securities [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount				$ 24,100,000

XML

Real Estate Loans, Notes Receivable, and Lines of Credit phantom facts (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Sep. 30, 2018	Jan. 01, 2018
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
loan commitment guaranty limit amount				$ 2,000,000
line of credit receivable	$ 45,143,000
Deferred interest rate	4.02%	5.34%
current interest rate	8.48%	8.47%
loan commitment guaranty percent				25.00%
Oxford Capital Partners LLC [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
line of credit receivable	$ 8,000,000
interest rate note receivable	12.00%
360 Residential [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
interest rate note receivable			12.00%		8.00%

XML

Real Estate Loans, Notes Receivable, and Lines of Credit CMBS (Details) $ in Millions	Mar. 28, 2019 USD ($)	Mar. 23, 2018 USD ($)	Jun. 30, 2019 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount			$ 362.0
Mortgage Backed Securities, Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
number of loans in CMBS trust	21	20
total maturity amount of CMBS pool	$ 295.7	$ 276.3
CMBS b piece maturity	16 years 1 month	16 years
CMBS B piece maturity amount	$ 29.6
yield to maturity CMBS	0.00%	0.00%
2018-ML04 [Domain] | Mortgage Backed Securities, Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
CMBS B piece maturity amount		$ 27.6

XML

Redeemable Preferred Stock (Details)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019 USD ($) $ / shares shares	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) $ / shares shares	Jun. 30, 2018 USD ($) $ / shares	Sep. 30, 2018 $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares
Class of Stock [Line Items]
gross potential offering proceeds	$ 2,700,000,000		$ 2,700,000,000
Common Stock, Dividends, Per Share, Declared | $ / shares			$ 0.5225	$ 0.505	$ 0.523
Proceeds from Other Equity			$ 1,111,255,000
daycountvolweightedavgcalcformarketvalue	20		20
Preferred Stock, Dividend Rate, Percentage			6.00%
aggregate offering costs	$ 108,950,000		$ 108,950,000
prorataamountofferingcostsreclassed			10,858,000
deferred offering costs not yet reclassified	3,700,000		$ 3,700,000
shares common stock from warrant exercises | shares			20
Deferred offering costs	14,542,000		$ 14,542,000
specifically identifiable offering costs			94,408,000
Dividends, Common Stock, Cash	$ 11,581,000	$ 10,104,000	$ 22,776,000	$ 19,906,000
Series A Preferred Stock [Member]
Class of Stock [Line Items]
preferred stock | shares	1,929,000		1,929,000			1,674,000
Preferred Stock, Par or Stated Value Per Share | $ / shares	$ 0.01		$ 0.01			$ 0.01
Preferred Stock, Value, Issued	$ 18,000		$ 18,000			$ 16,000
2019 Shelf Offering [Member] [Domain]
Class of Stock [Line Items]
maximum shares available to be issued | shares	400,000,000		400,000,000
2019 ATM Offering [Member] [Domain]
Class of Stock [Line Items]
maximum shares available to be issued | shares					125,000,000
2016 Shelf Offering [Member]
Class of Stock [Line Items]
gross potential offering proceeds	$ 300,000,000		$ 300,000,000
Proceeds from Other Equity			$ 98,080,000
proceeds from other equity percent of offering	100.00%		100.00%
aggregate offering costs	$ 5,063,000		$ 5,063,000
prorataamountofferingcostsreclassed			2,062,000
deferred offering costs not yet reclassified	0		0
Deferred offering costs	$ 2,062,000		2,062,000
specifically identifiable offering costs			$ 3,001,000
$1.5 billion unit [Domain]
Class of Stock [Line Items]
maximum shares available to be issued | shares	1,500,000		1,500,000
Unit Offering [Member]
Class of Stock [Line Items]
gross potential offering proceeds	$ 1,500,000,000		$ 1,500,000,000
Proceeds from Other Equity			$ 939,340,000
proceeds from other equity percent of offering	75.00%		75.00%
aggregate offering costs	$ 96,501,000		$ 96,501,000
prorataamountofferingcostsreclassed			6,014,000
deferred offering costs not yet reclassified	2,000,000		2,000,000
Deferred offering costs	8,003,000		8,003,000
specifically identifiable offering costs			$ 88,498,000
ceiling deferred offering costs			11.50%
offering costs reimbursable to the Manager			0.015
mShares [Domain]
Class of Stock [Line Items]
gross potential offering proceeds	$ 500,000,000		$ 500,000,000
Proceeds from Other Equity			$ 73,835,000
proceeds from other equity percent of offering	74.00%		74.00%
aggregate offering costs	$ 6,676,000		$ 6,676,000
prorataamountofferingcostsreclassed			2,782,000
deferred offering costs not yet reclassified	$ 1,000,000		$ 1,000,000
maximum shares available to be issued | shares	500,000		500,000
Deferred offering costs	$ 3,767,000		$ 3,767,000
specifically identifiable offering costs			2,909,000
2016 Shelf Offering [Member] [Domain]
Class of Stock [Line Items]
gross potential offering proceeds	400,000,000		400,000,000
Proceeds from Other Equity			0
aggregate offering costs	710,000		710,000
prorataamountofferingcostsreclassed			0
deferred offering costs not yet reclassified	700,000		700,000
Deferred offering costs	$ 710,000		710,000
specifically identifiable offering costs			$ 0

XML

Related Party Transactions (Details)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019 USD ($) shares	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) shares	Jun. 30, 2018 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Related Party Transaction [Line Items]
Management fees	$ 8,209,000	$ 6,621,000	$ 16,038,000	$ 12,862,000
loan coordination fee percentage					1.60%
loan coordination fees	621,000	814,000	965,000	1,554,000
Cost of Reimbursable Expense (Deprecated 2018-01-31)	$ 4,213,000		8,292,000
property salaries related party net		3,930,000		7,539,000
capital marketing and professional			$ 256,162	238,538
Common Stock, Shares, Outstanding | shares	44,246,703		44,246,703
Construction Management Fee	$ 78,000	142,000	$ 136,000	273,000
Related Party Transaction, Expenses from Transactions with Related Party	9,959,000	11,511,000	19,829,000	22,567,000
Property management fees			4,079,000	3,609,000
AcquisitionFeesRelatedPartyCosts	1,203,000	2,861,000	2,603,000	4,620,000
loan origination fees	125,000	411,000	526,000	1,211,000
manager's fees deferred			18,100,000		$ 18,100,000
Financing Receivable, Gross	57,310,000		57,310,000
Loans and Leases Receivable, Net Amount	45,142,000		45,142,000			$ 47,307,000
disposition fee to manager	16,000	$ 0	16,000	$ 435,000
line of credit receivable	45,143,000		45,143,000
percent of asset value for loan coordination fee					63.00%
manager's fees deferred	$ 16,600,000		$ 16,600,000
Leasing commission fees, new lease	3000000.00%	0.00%	5300000.00%	900000.00%
AssetmanagementFees [Member]
Related Party Transaction [Line Items]
Management fees	$ 3,840,000	$ 3,600,000	$ 7,565,000	$ 7,265,000
Propertymanagementfees [Member]
Related Party Transaction [Line Items]
Property management fees	2,495,000	2,148,000	4,951,000	4,241,000
General and Administrative Expense [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	$ 1,581,000	$ 1,535,000	$ 3,067,000	2,968,000
Cash Distribution [Member]
Related Party Transaction [Line Items]
priorityannualreturnoncapitalandexpensesassetsales			0.00%
preferred capital securities [Member]
Related Party Transaction [Line Items]
marketing and legal cost reimbursements			$ 680,116	$ 727,601
Retail Site [Member]
Related Party Transaction [Line Items]
Number of Real Estate Properties	49		49			45
PCMS [Member]
Related Party Transaction [Line Items]
Financing Receivable, Gross	$ 1,500,000		$ 1,500,000
Loans and Leases Receivable, Net Amount	686,000		686,000			$ 763,000
PCMS [Member] | PCMS [Member]
Related Party Transaction [Line Items]
Loans and Leases Receivable, Net Amount	686,000		686,000
PAA [Member]
Related Party Transaction [Line Items]
Loans and Leases Receivable, Net Amount	16,842,000		16,842,000			$ 9,778,000
line of credit receivable	$ 22,000,000		$ 22,000,000

XML

Dividends (Details) - USD ($)	6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018
Dividends Payable [Line Items]
minority interest partnership units outstanding	874,937
Common Stock, Dividends, Per Share, Declared	$ 0.5225	$ 0.505	$ 0.523
dividends common stock declared	$ 22,776,000	$ 19,906,000
Dividends, Preferred Stock, Cash	$ 76,315,000	60,887,000
Common Stock, Shares, Outstanding	44,246,703
Series A Preferred Stock [Member]
Dividends Payable [Line Items]
Preferred Stock, Dividend Rate, Per-Dollar-Amount	$ 5.00
Dividends, Preferred Stock, Cash	$ 51,240,000	$ 39,737,000
Minimum [Member] | mShares [Domain]
Dividends Payable [Line Items]
Preferred Stock, Dividend Rate, Per-Dollar-Amount	$ 4.79
Maximum [Member] | mShares [Domain]
Dividends Payable [Line Items]
Preferred Stock, Dividend Rate, Per-Dollar-Amount	$ 6.25

XML

Dividends Series A Preferred Dividends (Details) - USD ($)	6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018
Dividends Payable [Line Items]
Common Stock, Dividends, Per Share, Declared	$ 0.5225	$ 0.505	$ 0.523
Dividends, Preferred Stock, Cash	$ 76,315,000	$ 60,887,000
Distribution Made to Limited Partner, Cash Distributions Declared	458,000	540,000
dividends common stock declared	22,776,000	19,906,000
Series A Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends, Preferred Stock, Cash	51,240,000	39,737,000
Series M Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends, Preferred Stock, Cash	$ 1,841,000	$ 704,000

XML

Dividends NCI (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Equity [Abstract]
Distribution Made to Limited Partner, Cash Distributions Declared	$ 458,000	$ 540,000

XML

Equity Compensation (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018	Jan. 03, 2017
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	2,617,500		2,617,500
Share-based Compensation	$ 306,000	$ 950,000	$ 617,000	$ 2,085,000	$ 617,000
market vesting condition capital increase threshhold				$ 5,660,580
Restricted Stock [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Share-based Compensation			$ 26,000
ClassBUnits [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
common stock fair value per share						$ 20.19
Class B Units valuation assumption dividend yield						4.95%
ClassBUnit valuation assumption expected volatility						25.70%
Class B Unit valuation assumptions risk free rate						2.71%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				256,087
Share-based Compensation					$ 93,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value						$ 4,266,409

XML

Equity Compensation Restricted Stock (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018	Jan. 03, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	2,617,500		2,617,500
Share-based Compensation	$ 306,000	$ 950,000	$ 617,000	$ 2,085,000	$ 617,000
ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
common stock fair value per share						$ 20.19
Share-based Compensation					93,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				256,087
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation			$ 26,000
2017 [Member] | ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	78,000	88,000		$ 195,000	156,000
2017 [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			24,408
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Intrinsic Value, Amount Per Share			$ 14.75
Stock Granted, Value, Share-based Compensation, Gross			$ 360,018
Share-based Compensation	0	30,000		120,000	0
2018 [Domain] | ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	71,000	648,000		1,464,000	143,000
2018 [Domain] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			24,810
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Intrinsic Value, Amount Per Share			$ 14.51
Stock Granted, Value, Share-based Compensation, Gross			$ 359,993
Share-based Compensation	30,000	60,000		60,000	120,000
2019 [Domain] [Domain] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			26,446
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Intrinsic Value, Amount Per Share			$ 15.88
Stock Granted, Value, Share-based Compensation, Gross			$ 420,000
Share-based Compensation	$ 70,000	$ 0		$ 0	$ 70,000

XML

Equity Compensation Committee Fee Grants (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	$ 306,000	$ 950,000	$ 617,000	$ 2,085,000	$ 617,000
ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				256,087
Share-based Compensation					$ 93,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation			$ 26,000

XML

Equity Compensation Class B Units (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018	Jan. 03, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Dividends, Per Share, Declared			$ 0.5225	$ 0.505	$ 0.523
Share-based Compensation	$ 306,000	$ 950,000	$ 617,000	$ 2,085,000	$ 617,000
market vesting condition capital increase threshhold				$ 5,660,580
ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
common stock fair value per share						$ 20.19
Common Stock, Dividends, Per Share, Declared				$ 0.25
Share-based Compensation					$ 93,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum			20 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				256,087
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum			30 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value						$ 4,266,409
Class B Units valuation assumption dividend yield						4.95%
ClassBUnit valuation assumption expected volatility						25.70%
Class B Unit valuation assumptions risk free rate						2.71%
100percentvestinglevel [Member] | ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value						$ 16.66
one year [Member] | ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				171,988
three year [Member] | ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				84,099
2018 [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
class B units issued during period			256,087
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period			(189,264)
Partners' Capital Account, Units, Converted			0
class b units unearned and unvested			34,248
class b units unearned and vested			32,575
class b units outstanding	66,823		66,823
2017 [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
class B units issued during period			286,392
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period			(5,334)
Partners' Capital Account, Units, Converted			(254,730)
class b units unearned and unvested			26,328
class b units unearned and vested			0
class b units outstanding	26,328		26,328
Executive Officer [Member] | 2018 [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period			(128,258)
Executive Officer [Member] | 2017 [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period			0
Former CEO - John A. Williams [Member] | 2018 [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period			(38,284)
Former CEO - John A. Williams [Member] | 2017 [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period			0
Other OP Unit Participants [Member] | 2018 [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period			(22,722)
Other OP Unit Participants [Member] | 2017 [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period			(5,334)

XML

Equity Compensation Warrant (Details) - $ / shares	6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Dividends, Per Share, Declared	$ 0.5225	$ 0.505	$ 0.523

XML

Equity Compensation Equity compensation expense by grant (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Dividends, Per Share, Declared			$ 0.5225	$ 0.505	$ 0.523
Share-based Compensation	$ 306,000	$ 950,000	$ 617,000	$ 2,085,000	$ 617,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	1,352,000		1,352,000
ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Dividends, Per Share, Declared				$ 0.25
Share-based Compensation					93,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation			26,000
2016 [Member] | ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	0	74,000		$ 148,000	2,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	0		0
2017 [Member] | ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	78,000	88,000		195,000	156,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	159,000		159,000
2017 [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	0	30,000		120,000	0
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	0		0
2017 [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	20,000	22,000		43,000	38,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	36,000		36,000
2018 [Domain] | ClassBUnits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	71,000	648,000		1,464,000	143,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	430,000		430,000
2018 [Domain] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	30,000	60,000		60,000	120,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	0		0
2018 [Domain] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	21,000	28,000		55,000	40,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	139,000		139,000
2019 [Domain] [Domain] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	70,000	0		0	70,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	350,000		350,000
2019 [Domain] [Domain] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	16,000	$ 0		$ 0	$ 48,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 238,000		$ 238,000

XML

Equity Compensation Restricted Stock Units (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares	3 Months Ended	6 Months Ended
	Mar. 31, 2017	Jun. 30, 2019	Jun. 30, 2018
2017 [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Units outstanding	6,072
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Option, Nonvested, Intrinsic Value		$ 11.92
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	26,900
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value		$ 320,648
share based compensation awards forfeited		(6,674)
2018 [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Units outstanding			16,800
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Option, Nonvested, Intrinsic Value		$ 16.66
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			20,720
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value		$ 345,195
share based compensation awards forfeited		(3,920)
2019 [Domain] [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Units outstanding		26,480
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Option, Nonvested, Intrinsic Value		$ 10.77
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		27,760
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value		$ 298,975
share based compensation awards forfeited		(1,280)

XML

Indebtedness (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Debt Instrument [Line Items]
Initial Interest Rate	3.93%		3.93%
Unamortized Debt Issuance Expense	$ 1,400,000		$ 1,400,000
Long-term Debt, Current Maturities	119,237,000		119,237,000
Long-term Debt	2,429,242,000		$ 2,429,242,000		$ 2,299,625,000
variable interest rate minimum			3.25%
Long-term Debt, Maturities, Repayments of Principal in Year Two	73,063,000		$ 73,063,000
Long-term Debt, Maturities, Repayments of Principal in Year Three	179,341,000		179,341,000
Long-term Debt, Maturities, Repayments of Principal in Year Four	219,111,000		219,111,000
Long-term Debt, Maturities, Repayments of Principal after Year Five	194,072,000		194,072,000
Long-term Debt, Maturities, Repayments of Principal after Year Five	1,685,021,000		1,685,021,000
Long-term Debt	2,469,845,000		2,469,845,000
Interest Expense	27,611,000	$ 22,347,000	54,367,000	$ 43,315,000
Line of Credit Facility, Amount Outstanding	$ 0		0		$ 57,000,000
Amortization of Financing Costs			$ 3,139,000	3,279,000
Spread over Initial Interest Rate option 1	200		200
Spread over Initial Interest Rate option 2	400		400
Indebtedness Weighted Average Remaining Maturity			9 years 8 months
Mortgages [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 2,469,845,000		$ 2,469,845,000
SoL [Member] | Mortgages [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate			21000.00%
Champions Village [Member] | Mortgages [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 27,400,000		$ 27,400,000
Debt Instrument, Interest Rate, Stated Percentage	5.44%		5.44%
Debt Instrument, Basis Spread on Variable Rate			3.00%
Office Building [Member]
Debt Instrument [Line Items]
Interest Expense	$ 5,357,000	$ 2,666,000	$ 10,708,000	$ 5,207,000
Champions Village [Member]
Debt Instrument [Line Items]
loan commitment amount	$ 34,200,000		34,200,000
Lake Cameron [Member]
Debt Instrument [Line Items]
Defeasance fee			$ 400,000

XML

Indebtedness debt covenants (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Sep. 30, 2016
debt covenants [Line Items]
dividend restriction AFFO	95.00%
Line of Credit Facility, Maximum Borrowing Capacity		$ 200,000,000
minimum equity debt covenants	$ 687,000,000
equity raise above min equity required	75.00%
total debt covenant min equity	$ 1,000,000,000
maximum dividends debt covenant	151,000,000
Minimum Net Worth Required for Compliance	$ 1,800,000,000
debt yield	10.24%
payout ratio	90.80%
Total leverage ratio	56.70%

XML

Indebtedness Credit Facility (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Sep. 30, 2016	May 26, 2016
Line of Credit Facility [Line Items]
Indebtedness Weighted Average Remaining Maturity	9 years 8 months
Short-term Debt			$ 11,000,000
Short-term Debt, Weighted Average Interest Rate, at Point in Time	5.60%
Line of Credit Facility, Maximum Borrowing Capacity		$ 200,000,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Indebtedness Weighted Average Remaining Maturity	2 years 6 months
term loan [Member] [Member]
Line of Credit Facility [Line Items]
Loans Receivable, Basis Spread on Variable Rate	2.50%
Minimum [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.25%
Minimum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Loans Receivable, Basis Spread on Variable Rate	2.75%
Maximum [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.30%
Maximum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Loans Receivable, Basis Spread on Variable Rate	3.50%

XML

Indebtedness Acquisition Credit Facility (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Mar. 01, 2021	Sep. 30, 2016
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 200,000,000
Unamortized Debt Issuance Expense	$ 1,400,000
Indebtedness Weighted Average Remaining Maturity	9 years 8 months
February 2017 facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 200,000,000
Subsequent Event [Member] | February 2017 facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		$ 300,000,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Indebtedness Weighted Average Remaining Maturity	2 years 6 months
acquisition facility [Member]
Line of Credit Facility [Line Items]
Unamortized Debt Issuance Expense	$ 200,000
Indebtedness Weighted Average Remaining Maturity	2 years 8 months
Minimum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Loans Receivable, Basis Spread on Variable Rate	2.75%
Minimum [Member] | Revolving Credit Facility [Member] | February 2017 facility [Member]
Line of Credit Facility [Line Items]
Loans Receivable, Basis Spread on Variable Rate	1.80%
Maximum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Loans Receivable, Basis Spread on Variable Rate	3.50%
Maximum [Member] | Revolving Credit Facility [Member] | February 2017 facility [Member]
Line of Credit Facility [Line Items]
Loans Receivable, Basis Spread on Variable Rate	2.20%

XML

Indebtedness Mortgage debt summary by segment (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Secured Debt	$ 2,469,845,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	4.15%
average maturity mortgage debt	9 years 1 month
Deferred Finance Costs, Own-share Lending Arrangement, Issuance Costs, Accumulated Amortization Adjustment	$ (35,849,000)
Mark-to-Market debt	(4,754,000)
Long-term Debt	2,429,242,000	$ 2,299,625,000
Fixed Income Interest Rate [Member]
Debt Instrument [Line Items]
Secured Debt	$ 2,230,047,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	4.02%
average maturity mortgage debt	9 years 11 months
Variable Income Interest Rate [Member]
Debt Instrument [Line Items]
Secured Debt	$ 239,798,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	5.35%
average maturity mortgage debt	2 years 5 months
multifamily community [Domain]
Debt Instrument [Line Items]
Secured Debt	$ 1,112,826,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	3.94%
average maturity mortgage debt	9 years 1 month
multifamily community [Domain] | Fixed Income Interest Rate [Member]
Debt Instrument [Line Items]
Secured Debt	$ 1,032,344,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	3.92%
average maturity mortgage debt	9 years 5 months
multifamily community [Domain] | Variable Income Interest Rate [Member]
Debt Instrument [Line Items]
Secured Debt	$ 80,482,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	4.29%
average maturity mortgage debt	4 years 5 months
Retail Segment [Member]
Debt Instrument [Line Items]
Secured Debt	$ 580,006,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	4.01%
average maturity mortgage debt	7 years 5 months
Retail Segment [Member] | Fixed Income Interest Rate [Member]
Debt Instrument [Line Items]
Secured Debt	$ 552,606,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	3.93%
average maturity mortgage debt	7 years 7 months
Retail Segment [Member] | Variable Income Interest Rate [Member]
Debt Instrument [Line Items]
Secured Debt	$ 27,400,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	5.44%
average maturity mortgage debt	2 years 5 months
Office Building [Member]
Debt Instrument [Line Items]
Secured Debt	$ 484,773,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	4.32%
average maturity mortgage debt	14 years 7 months
Office Building [Member] | Fixed Income Interest Rate [Member]
Debt Instrument [Line Items]
Secured Debt	$ 484,773,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	4.32%
average maturity mortgage debt	14 years 7 months
Office Building [Member] | Variable Income Interest Rate [Member]
Debt Instrument [Line Items]
Secured Debt	$ 0
Long-term Debt, Weighted Average Interest Rate, at Point in Time	0.00%
student housing community [Domain]
Debt Instrument [Line Items]
Secured Debt	$ 292,240,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	4.97%
average maturity mortgage debt	3 years 11 months
student housing community [Domain] | Fixed Income Interest Rate [Member]
Debt Instrument [Line Items]
Secured Debt	$ 160,324,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	4.13%
average maturity mortgage debt	6 years 1 month
student housing community [Domain] | Variable Income Interest Rate [Member]
Debt Instrument [Line Items]
Secured Debt	$ 131,916,000
Long-term Debt, Weighted Average Interest Rate, at Point in Time	5.98%
average maturity mortgage debt	1 year 1 month

XML

Indebtedness New mortgages (Details) - USD ($)	6 Months Ended	9 Months Ended
	Jun. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term Debt	$ 2,429,242,000		$ 2,299,625,000
Debt Issuance Costs, Net	1,591,000		$ 1,916,000
Mortgages [Member]
Debt Instrument [Line Items]
Long-term Debt	2,469,845,000
disston plaza [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 18,038,000
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, Interest Rate	4.00%
polo grounds [Domain]
Debt Instrument [Line Items]
Long-term Debt	$ 13,325,000
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, Interest Rate	4.00%
free state [Domain]
Debt Instrument [Line Items]
Long-term Debt	$ 46,800,000
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, Interest Rate	4.00%
haven charlotte [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 41,550,000
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, Interest Rate	6.00%
SoL [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		20000.00%
Long-term Debt	$ 37,500,000
Debt Issuance Costs, Net	$ 41,000
retreat at greystone [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		18500.00%
Aldridge at Town Village [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		18500.00%
SoL [Member] | Mortgages [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	21000.00%

XML

Income Taxes (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2010
Operating Loss Carryforwards [Line Items]
Deferred Tax Assets, Net of Valuation Allowance		$ 298,100
DeferredTaxAssetsValuationAllowancePercentage	100.00%

XML

Commitments and Contingencies (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
lease term					11 years
guaranty cap amount					$ 5,500,000
Annual reduction in guaranty cap					619,304
guaranty cap amount credit cards					640,000
manager's fees deferred	$ (2,795,000)	$ (1,429,000)	$ (5,424,000)	$ (2,649,000)
cumulative manager's fees deferred			18,100,000		$ 18,100,000
real estate loan balances unfunded	81,000,000		81,000,000
Unfunded Tenant Leasing Commissions and Tenant Allowances	$ 14,000,000		$ 14,000,000

XML

Segment information (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
capitalized expenditures for long lived assets	$ 5,970,000	$ 7,788,000	$ 9,672,000	$ 13,693,000
Assets	4,980,518,000		4,980,518,000			$ 4,410,958,000
Operating Leases, Income Statement, Lease Revenue	95,592,000	76,552,000	187,830,000	150,814,000
adjusted funds from operations	77,522,000	66,327,000	154,146,000	128,690,000
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest	(1,677,000)	(5,278,000)	(3,957,000)	8,985,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(1,677,000)	(5,278,000)	(3,957,000)	8,985,000
Interest Expense	27,611,000	22,347,000	54,367,000	43,315,000
Depreciation	36,722,000	29,754,000	72,842,000	57,744,000
Share-based Compensation	(306,000)	(950,000)	(617,000)	(2,085,000)	$ (617,000)
Gains (Losses) on Sales of Investment Real Estate	0	(2,000)	0	(20,356,000)
Fair Value, Assets Measured on Recurring Basis, Change in Unrealized Gain (Loss)	(584,000)	(54,000)	(725,000)	(54,000)
Gain (Loss) on Sale of Mortgage Loans	(747,000)	0	(747,000)	0
Gain (Loss) on Extinguishment of Debt	52,000	0	69,000	0
Trading Securities, Realized Gain	0	0	(4,000)	0
loan fees received			1,051,000	2,422,000
noncash loan interest income	888,000	769,000	1,773,000	1,243,000
Management fees net of deferrals	5,414,000	5,192,000	10,614,000	10,213,000
Allowance for Loan and Lease Losses, Loans Acquired	0	0	0	0
rental and other property revenues	95,592,000	76,552,000	187,830,000	150,814,000
Other property revenues	3,512,000	1,805,000	5,690,000	3,348,000
interest revenues loans and notes	13,263,000	17,531,000	29,941,000	31,599,000
miscellaneous revenues	1,023,000	0	1,023,000	0
Revenues	113,852,000	96,389,000	225,358,000	186,759,000
Multifamily [Member]
Segment Reporting Information [Line Items]
capitalized expenditures for long lived assets	3,633,000	5,859,000	4,845,000	10,698,000
Multifamily Communities
Segment Reporting Information [Line Items]
Assets	1,480,775,000		1,480,775,000			1,503,648,000
Operating Leases, Income Statement, Lease Revenue	40,848,000	38,896,000	81,162,000	77,758,000
adjusted funds from operations	24,146,000	22,745,000	48,390,000	46,268,000
Interest Expense	11,816,000	11,252,000	23,272,000	22,188,000
Depreciation	18,391,000	20,320,000	38,802,000	42,023,000
Other property revenues	1,345,000	1,436,000	2,640,000	2,729,000
Student Housing Properties [Member]
Segment Reporting Information [Line Items]
adjusted funds from operations	7,150,000	3,905,000	12,241,000	6,941,000
Interest Expense	4,005,000	2,384,000	7,349,000	4,075,000
Depreciation	6,179,000	7,496,000	11,633,000	12,601,000
Student Housing Communities [Member]
Segment Reporting Information [Line Items]
Operating Leases, Income Statement, Lease Revenue	11,433,000	7,097,000	21,457,000	12,766,000
Other property revenues	210,000	107,000	404,000	190,000
student housing [Member]
Segment Reporting Information [Line Items]
capitalized expenditures for long lived assets	910,000	927,000	1,823,000	1,208,000
Assets	496,021,000		496,021,000			411,102,000
financingsegment [Member]
Segment Reporting Information [Line Items]
Assets	497,055,000		497,055,000			448,617,000
adjusted funds from operations	13,286,000	17,531,000	29,965,000	31,599,000
Interest Expense	318,000	1,415,000	1,337,000	2,860,000
New Market Properties [Member]
Segment Reporting Information [Line Items]
adjusted funds from operations	16,425,000	12,812,000	32,230,000	25,485,000
Interest Expense	6,115,000	4,630,000	11,701,000	8,985,000
Depreciation	10,632,000	9,177,000	20,967,000	18,057,000
Retail Segment [Member]
Segment Reporting Information [Line Items]
Assets	1,026,418,000		1,026,418,000			883,594,000
Operating Leases, Income Statement, Lease Revenue	22,346,000		43,875,000
Other property revenues	536,000	645,000	1,066,000	1,221,000
woodstock retail [Member]
Segment Reporting Information [Line Items]
Operating Leases, Income Statement, Lease Revenue		17,567,000		34,906,000
Office Building [Member]
Segment Reporting Information [Line Items]
Assets	878,848,000		878,848,000			884,648,000
Operating Leases, Income Statement, Lease Revenue	20,965,000	12,992,000	41,336,000	25,384,000
adjusted funds from operations	16,515,000	9,334,000	31,320,000	18,397,000
Interest Expense	5,357,000	2,666,000	10,708,000	5,207,000
Depreciation	10,461,000	5,102,000	19,550,000	10,030,000
Other property revenues	1,883,000	118,000	2,454,000	206,000
Other Assets [Member]
Segment Reporting Information [Line Items]
Assets	601,401,000		601,401,000			$ 279,349,000
All Other Segments [Member]
Segment Reporting Information [Line Items]
adjusted funds from operations	596,000	308,000	1,187,000	548,000
as adjusted [Member]
Segment Reporting Information [Line Items]
Other property revenues	3,974,000	2,306,000	6,564,000	4,346,000
Retail Site [Member]
Segment Reporting Information [Line Items]
capitalized expenditures for long lived assets	$ 1,427,000	$ 1,002,000	$ 3,004,000	$ 1,787,000

XML

Loss per Share (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Income (Loss) before Gain (Loss) on Sale of Properties	$ 24,655,000	$ 17,013,000	$ 49,003,000	$ 31,890,000
minority interest partnership units outstanding	874,937		874,937
Restricted Stock Units outstanding			49,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ (1,677,000)	(5,278,000)	$ (3,957,000)	8,985,000
Gains (Losses) on Sales of Investment Real Estate	0	2,000	4,000	20,356,000
Operating Income (Loss)	24,655,000	17,015,000	49,007,000	52,246,000
Net Income (Loss) Attributable to Parent	(1,106,000)	(5,138,000)	(3,878,000)	8,745,000
Gain (Loss) on Sales of Loans, Net	747,000	0	747,000	0
Gain (Loss) on Extinguishment of Debt	(52,000)	0	(69,000)	0
Dividends, Preferred Stock	27,542,000	20,924,000	53,081,000	40,441,000
Deemed noncash dividend			(210,000)	(153,000)
NetIncomeAllocatedToUnvestedRestrictedShares	7,000	6,000	9,000	8,000
Income (Loss) Attributable to Noncontrolling Interest, before Tax	(571,000)	(140,000)	(79,000)	240,000
Interest Expense	27,611,000	22,347,000	54,367,000	43,315,000
Fair Value, Assets Measured on Recurring Basis, Change in Unrealized Gain (Loss)	584,000	54,000	725,000	54,000
Net Income (Loss) Available to Common Stockholders, Basic	$ (28,655,000)	$ (26,068,000)	$ (56,968,000)	$ (31,704,000)
Weighted Average Number of Shares Outstanding, Diluted	43,703,000	39,383,000	43,194,000	39,241,000
Preferred Stock, Dividend Rate, Percentage			6.00%
Incremental Common Shares from conversion of outstanding units	27,246,000		27,246,000
Share-based Compensation	$ 306,000	$ 950,000	$ 617,000	$ 2,085,000	$ 617,000
Earnings Per Share, Basic	$ (0.66)	$ (0.66)	$ (1.32)	$ (0.81)
ClassBUnits [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				256,087
Share-based Compensation					$ 93,000
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	26,000		26,000			25,000
Share-based Compensation			$ 26,000
Series A [Member] | Minimum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Preferred Stock, Dividend Rate, Percentage			5.75%
mShares [Domain] | Maximum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Preferred Stock, Dividend Rate, Percentage			7.50%
Series A Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Preferred Stock, Shares Outstanding	1,829,000	1,418,000	1,829,000	1,418,000		1,608,000
Series M Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Preferred Stock, Shares Outstanding	73,000	29,000	73,000	29,000		44,000

XML

Pro Forma Financial Information (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Revenues	$ 113,852	$ 96,389	$ 225,358	$ 186,759
Weighted Average Number of Shares Outstanding, Diluted	43,703	39,383	43,194	39,241

XML

Fair Values of Financial Instruments (Details)	6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018	Jan. 02, 2018 USD ($)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Variable Interest Entity, Consolidated, Assets, Pledged	$ 596,129,000		$ 269,946,000		$ 289,325,000
variable interest entity change in fair value of consolidated net assets	415,000
line of credit receivable	45,143,000
financial assets carrying value	405,323,000
Mortgage notes payable	2,429,242,000		2,299,625,000
Line of Credit Facility, Amount Outstanding	0		57,000,000
Debt, Long-term and Short-term, Combined Amount			2,401,933,000
Real estate loans carrying value including accrued interest	360,180,000
Variable Interest Entity, Consolidated, Liabilities, Recourse	571,999,000		264,886,000		270,670,000
mortgage principal received from consolidated VIE	(2,073,000)	$ (171,000)
net balance VIE payments	0
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net	24,130,000		5,060,000		$ 18,655,000
Consolidated VIE count of underlying mortgages				40
Mortgages [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	2,469,845,000
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Variable Interest Entity, Consolidated, Assets, Pledged	0		0
Assets, Fair Value Disclosure	0
real estate related loans fair value	0
Long-term Debt, Fair Value	0
Financial and Nonfinancial Liabilities, Fair Value Disclosure			0
Variable Interest Entity, Consolidated, Liabilities, Recourse	0		0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Variable Interest Entity, Consolidated, Assets, Pledged	596,129,000		269,946,000
Assets, Fair Value Disclosure	437,422,000
real estate related loans fair value	392,279,000
Long-term Debt, Fair Value	2,522,323,000
Financial and Nonfinancial Liabilities, Fair Value Disclosure			2,375,586,000
Variable Interest Entity, Consolidated, Liabilities, Recourse	571,999,000		264,886,000
Fair Value, Inputs, Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Variable Interest Entity, Consolidated, Assets, Pledged	0		0
real estate related loans fair value	0
Long-term Debt, Fair Value	0
Variable Interest Entity, Consolidated, Liabilities, Recourse	0		0
Mortgages [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
real estate related loans fair value	392,279,000
Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
line of credit receivable			47,307,000
financial assets carrying value			381,518,000
Participating Mortgage Loans, Mortgage Obligations, Amount			5,181,000
Real estate loans carrying value including accrued interest			334,211,000
Reported Value Measurement [Member] | Mortgages [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable			2,339,752,000
Reported Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Line of Credit Facility, Amount Outstanding			57,000,000
Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
line of credit receivable			47,307,000
Participating Mortgage Loans, Mortgage Obligations, Amount			5,181,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, Fair Value Disclosure			0
Long-term Debt, Fair Value			0
Line of Credit Facility, Amount Outstanding			0
Participating Mortgage Loans, Mortgage Obligations, Amount			0
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, Fair Value Disclosure			413,635,000
real estate related loans fair value			366,328,000
Long-term Debt, Fair Value			2,313,405,000
Line of Credit Facility, Amount Outstanding			57,000,000
Participating Mortgage Loans, Mortgage Obligations, Amount			5,181,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, Fair Value Disclosure			0
Long-term Debt, Fair Value			0
Line of Credit Facility, Amount Outstanding			0
Participating Mortgage Loans, Mortgage Obligations, Amount			0
Financial and Nonfinancial Liabilities, Fair Value Disclosure			0
Estimate of Fair Value Measurement [Member] | Mortgages [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, Fair Value Disclosure			$ 366,328,000
Other Noncurrent Assets [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Change in Unrealized Gain (Loss)	38,931,000
Other Noncurrent Liabilities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Variable Interest Entity, Consolidated, Assets, Pledged	$ 38,516,000

XML

Subsequent Events sub events (Details)	3 Months Ended			6 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) shares	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) $ / shares	Jun. 30, 2018 USD ($) $ / shares	Sep. 30, 2018 $ / shares	Jun. 30, 2019 ft²	Jun. 30, 2019	Dec. 31, 2018 USD ($) ft²
Subsequent Event [Line Items]
Common Stock, Dividends, Per Share, Declared | $ / shares				$ 0.5225	$ 0.505	$ 0.523
Proceeds from Issuance of Preferred Stock and Preference Stock		$ (123,910,000)	$ (113,449,000)	$ (252,592,000)	$ (13,569,000)
mortgage debt refinanced				24,477,000	$ 37,485,000
real estate loans commitment amount				443,061,000
Long-term Debt		2,429,242,000		2,429,242,000					$ 2,299,625,000
Number of units in real estate property							575	9,768	9,768
Area of Real Estate Property | ft²							5,412,328		4,730,695
Subsequent Event [Member] | Unitsissued [Member]
Subsequent Event [Line Items]
Unitsissuedcumulative | shares	38,684
Proceeds from Issuance of Preferred Stock and Preference Stock	$ 34,800,000
SoL [Member]
Subsequent Event [Line Items]
Long-term Debt		$ 37,500,000		$ 37,500,000
Series M Preferred Stock [Member] | Subsequent Event [Member] | Unitsissued [Member]
Subsequent Event [Line Items]
Unitsissuedcumulative | shares	4,896
Proceeds from Issuance of Preferred Stock and Preference Stock	$ 4,700,000

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Operating Leases (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Operating Leases, Future Minimum Payments Receivable, Remainder of Fiscal Year	$ 62,347,000	$ 114,707,000
Operating Leases, Future Minimum Payments Receivable, in Two Years	126,454,000	113,653,000
Operating Leases, Future Minimum Payments Receivable, in Three Years	117,335,000	101,957,000
Operating Leases, Future Minimum Payments Receivable, in Four Years	108,154,000	93,326,000
Operating Leases, Future Minimum Payments Receivable, in Five Years	100,416,000	86,905,000
Operating Leases, Future Minimum Payments Receivable, Thereafter	424,334,000	378,216,000
Operating Leases, Future Minimum Payments Receivable	939,040,000	888,764,000
Office Building [Member]
Operating Leases, Future Minimum Payments Receivable, Remainder of Fiscal Year	28,476,000	56,564,000
Operating Leases, Future Minimum Payments Receivable, in Two Years	62,266,000	61,704,000
Operating Leases, Future Minimum Payments Receivable, in Three Years	61,347,000	58,805,000
Operating Leases, Future Minimum Payments Receivable, in Four Years	61,171,000	58,108,000
Operating Leases, Future Minimum Payments Receivable, in Five Years	60,378,000	57,343,000
Operating Leases, Future Minimum Payments Receivable, Thereafter	306,324,000	298,469,000
Operating Leases, Future Minimum Payments Receivable	579,962,000	590,993,000
New Market Properties [Member]
Operating Leases, Future Minimum Payments Receivable, Remainder of Fiscal Year	33,871,000	58,143,000
Operating Leases, Future Minimum Payments Receivable, in Two Years	64,188,000	51,949,000
Operating Leases, Future Minimum Payments Receivable, in Three Years	55,988,000	43,152,000
Operating Leases, Future Minimum Payments Receivable, in Four Years	46,983,000	35,218,000
Operating Leases, Future Minimum Payments Receivable, in Five Years	40,038,000	29,562,000
Operating Leases, Future Minimum Payments Receivable, Thereafter	118,010,000	79,747,000
Operating Leases, Future Minimum Payments Receivable	$ 359,078,000	$ 297,771,000

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Quarterly Financial Data (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Revenues	$ 113,852	$ 96,389	$ 225,358	$ 186,759
Operating Income (Loss)	24,655	17,015	49,007	52,246
Net Income (Loss) Attributable to Parent	(1,106)	(5,138)	(3,878)	8,745
Net Income (Loss) Available to Common Stockholders, Basic	$ (28,655)	$ (26,068)	$ (56,968)	$ (31,704)
Earnings Per Share, Basic	$ (0.66)	$ (0.66)	$ (1.32)	$ (0.81)
Weighted Average Number of Shares Outstanding, Diluted	43,703	39,383	43,194	39,241

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Schedule IV (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
current interest rate	8.48%	8.47%
Deferred interest rate	4.02%	5.34%
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate	$ 360,180,000