Real Estate Owned

6 Months Ended

Jun. 30, 2013

Real Estate [Abstract]

REAL ESTATE OWNED

REAL ESTATE OWNED

Real estate assets owned by the Company consist of income producing operating properties, properties under development and land held for future development. As of June 30, 2013, the Company owned and consolidated 141 communities in 10 states plus the District of Columbia totaling 41,153 apartment homes. The following table summarizes the carrying amounts for our real estate owned (at cost) as of June 30, 2013 and December 31, 2012(dollar amounts in thousands):

	June 30, 2013			December 31, 2012
Land	$	1,265,049		$	1,907,169
Depreciable property — held and used:
Building and improvements	6,054,933			5,384,971
Furniture, fixtures and equipment	262,999			272,640
Under development:
Land	112,091			151,154
Construction in progress	321,616			339,894
Real estate owned	8,016,688			8,055,828
Accumulated depreciation	(2,071,649		)	(1,924,682		)
Real estate owned, net	$	5,945,039		$	6,131,146

In June 2013, the Company sold a 50% interest in five partnerships (the "UDR/MetLife Vitruvian Park^® Partnerships") to MetLife for approximately $141.3 million, before transaction costs of $936,000. The properties held by the UDR/MetLife Vitruvian Park^® Partnerships are located in Addison, Texas and consist of two operating communities with 739 apartment homes, one community under development with 391 apartment homes upon completion, and 28.4 acres of developable land parcels. The transaction resulted in a gain of approximately $436,000 which the Company has deferred until completion of the development community (projected for the end of 2013). The UDR/MetLife Vitruvian Park^® Partnerships will be accounted for under the equity method of accounting and are included in “Investment in and advances to unconsolidated joint ventures, net” on our Consolidated Balance Sheets. See further discussion of this transaction in Note 5, Joint Ventures and Partnerships.

In accordance with GAAP, the operations of the UDR/MetLife Vitruvian Park^® Partnerships' assets, prior to the sale of a 50% interest, have been classified as a component of continuing operations on the Consolidated Statements of Operations, as UDR will recognize significant direct cash flows from the partially disposed properties over the duration of the partnership.

All development projects and related carrying costs are capitalized and reported on the Consolidated Balance Sheets as “Real estate under development.” The costs of development projects which include interest, real estate taxes, insurance and allocated development overhead related to support costs for personnel working directly on the development are capitalized during the construction period. These costs, excluding the direct costs of development and capitalized interest for the three and six months ended June 30, 2013 and 2012 were $3.1 million and $6.1 million and $2.0 million and $4.7 million, respectively. During the three and six months ended June 30, 2013 and 2012, total capitalized interest was $8.2 million and $16.6 million and $5.1 million and $10.0 million, respectively.

In October 2012, Hurricane Sandy hit the East Coast, affecting three of the Company’s operating communities (1,706 apartment homes) located in New York City. The properties suffered some physical damage, and were closed to residents for a period following the hurricane. The Company has insurance policies that provide coverage for property damage and business interruption, subject to applicable retention.

Based on the claims filed and management’s estimates, the Company recognized a $9.0 million impairment charge for the damaged assets’ net book value and incurred $10.4 million of repair and cleanup costs during the year ended December 31, 2012. The impairment charge and the repair and cleanup costs incurred were reduced as of December 31, 2012 by $14.5 million of estimated insurance recovery, and were classified in “Hurricane related (recoveries)/charges, net” on the Consolidated Statements of Operations. During the three and six months endedJune 30, 2013, no further impairment charge related to the damaged assets' net book value has been recognized. With the exception of one of the properties that is under redevelopment at June 30, 2013, the rehabilitation of the remaining two properties is expected to be completed in the third quarter of 2013. See Note 14, Hurricane Related (Recoveries)/Charges for additional information.