4. Strategic Repositioning Initiatives

The Company continues to execute its strategic repositioning which began during the third quarter of 2014 and includes, among other things:

(1)

Simplifying the business model by discontinuing all construction and development and focusing on organic growth;

(2)

Reducing the number of joint ventures through planned dispositions of certain assets within its joint ventures to simplify asset ownership structure and reduce exposure to off-balance sheet obligations;

(3)

Disposing of land which was previously held for future development (included in land and property held for sale in the accompanying consolidated balance sheets, some of which were disposed of during the quarter ended March 31, 2015 (see Note 7) and the rest of which the Company expects to dispose of during the remainder of 2015); and,

(4)

Undergoing a review of strategic alternatives.

During the three months ended March 31, 2015 the Company sold its interest in the following joint venture properties: The Grove at Stillwater, OK, The Grove at Lawrence, KS, and The Grove at Conway, AR (see Note 7). These joint ventures were included in the Grove and evo Operations segment.

On January 16, 2015, the Company sold a portfolio of six undeveloped land parcels to a leading student housing developer resulting in net sale proceeds of $28.3 million. The portfolio included parcels located in Alabama, Arizona, California, Florida, Michigan and Washington. The sale was a part of the Company's previously announced strategic initiative to improve liquidity and simplify the balance sheet by selling certain properties previously held for development. (See Note 7). These land parcels were included in the Grove and evo Operations segment.

The Company also terminated the employment of certain employees and eliminated positions as part of the strategic repositioning. In connection with these terminations, the Company recognized severance expense of $0.5 million during the three months ended March 31, 2015, which is included in operating expenses in the consolidated statements of operations and comprehensive income (loss). Severance expense included $0.4 million for the acceleration of the vesting conditions of restricted shares for the three months ended March 31, 2015. As of March 31, 2015, there was $4.1 million of accrued severance included in accounts payable and accrued expenses in the consolidated balance sheet of which $2.7 million and $1.4 million is expected to be paid in the remainder of 2015 and 2016, respectively. Changes to the severance accrual during the three months ended March 31, 2015 are as follows (in thousands):

Balance at December 31, 2014	$	5,743
New charges		122
Cash payments		(1,732)
Balance at March 31, 2015	$	4,133