JOINT VENTURES AND PARTNERSHIPS

UDR has entered into joint ventures and partnerships with unrelated third parties to acquire real estate assets that are either consolidated and included in real estate owned on our Consolidated Balance Sheets or are 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. The Company consolidates an entity in which we own less than 100% but control the joint venture or partnership as well as any variable interest entity where we are the primary beneficiary. In addition, the Company consolidates any joint venture or partnership in which we are the general partner or managing member and the third party does not have the ability to substantively participate in the decision-making process nor the ability to remove us as general partner or managing member without cause.

UDR’s joint ventures and partnerships are funded with a combination of debt and equity. Our losses are limited to our investment and except as noted below, the Company does not guarantee any debt, capital payout or other obligations associated with our joint ventures and partnerships.

Unconsolidated Joint Ventures and Partnerships

The Company recognizes earnings or losses from our investments in unconsolidated joint ventures and partnerships consisting of our proportionate share of the net earnings or losses of the joint ventures and partnerships. In addition, we may earn fees for providing management services to the unconsolidated joint ventures and partnerships.

The following table summarizes the Company’s investment in and advances to unconsolidated joint ventures and partnerships, net which are accounted for under the equity method of accounting as of June 30, 2013 and December 31, 2012 (dollar amounts in thousands):



Joint Venture	Location of Properties	Number of Properties	Number of Apartment Homes	Investment at						UDR’s Ownership Interest
Joint Venture	Location of Properties	Number of Properties	Number of Apartment Homes	June 30, 2013			December 31, 2012			UDR’s Ownership Interest

UDR/MetLife I (a)	Various	8 operating communities	1,641	$	52,455		$	75,129		13.2	%
		8 land parcels	N/A							4.3	%
UDR/MetLife II (a)	Various	15 operating communities	3,119	323,401			327,001			50.0	%
UDR/MetLife Vitruvian Park^® (b)	Addison, TX	2 operating communities	739	80,162			—			50.0	%
		1 development community	391
		6 land parcels	N/A
Lodge at Stoughton	Stoughton, MA	1 operating community	240	16,020			16,311			95.0	%
KFH	Washington D.C.	3 operating communities	660	27,739			29,663			30.0	%
Texas JV	Texas	8 operating communities	3,359	1,999			3,457			20.0	%

13th & Market	San Diego, CA	1 development community	264	30,920			29,930			95.0	%
Domain College Park	College Park, MD	1 development community	256	26,108			25,546			95.0	%
				558,804			507,037

Deferred fees and gains on the sale of depreciable property				(25,469		)	(29,406		)

Total investment in and advances to unconsolidated joint ventures, net				$	533,335		$	477,631

(a) In June 2013 and within UDR/MetLife I, the Company exchanged with MetLife its approximately 10% ownership interest in four operating communities and paid MetLife an additional $15.6 million in cash for an increased ownership interest of approximately 35% in two high-rise operating communities, bringing UDR's ownership interest in the two high-rise operating communities to 50% each. The two high-rise operating communities are located in Denver, Colorado and San Diego, California and were subsequently contributed to UDR/MetLife II. The four operating communities in which UDR exchanged its ownership interest are located in Washington, D.C.; San Francisco, California; Dallas, Texas; and Charlotte, North Carolina. At 50% ownership, the Company's pro-rata share of the undepreciated book value of the UDR/MetLife II joint venture assets and outstanding debt is $796.4 million and $444.6 million, respectively, at June 30, 2013. UDR will continue to fee manage the four operating communities in which UDR exchanged its ownership interests.

(b) 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. 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). Under the terms of the UDR/MetLife Vitruvian Park^® Partnerships, the Company serves as the general partner with significant participating rights held by our partner, and earns fees for property management, asset management, and financing transactions. The UDR/MetLife Vitruvian Park^® Partnerships will be accounted for under the equity method of accounting. Our initial investment was approximately $80.2 million, which consisted of approximately $140.0 million (50% of our net book value of the real estate at the time of the transaction) reduced by our share of the net proceeds received upon encumbering the assets of approximately $58.7 million and other operating adjustments.

At closing, a total of $118.3 million of secured debt was placed on the two operating communities and the community under development. The debt on the two operating communities carries an interest rate of 4.0% with a term of ten years and the non-recourse construction loan on the community under development carries an interest rate of LIBOR plus 175 basis points with a term of two years and two one-year extension options. The Company has guaranteed the completion of the construction of the development. Proceeds from the construction loan will be used for completion of construction of the development. Upon completion, at its 50% ownership, the Company's pro-rata share of the undepreciated book value of the UDR/MetLife Vitruvian Park^® Partnerships' real estate assets and outstanding debt will be approximately $145.0 million and $62.8 million, respectively.

As of June 30, 2013 and December 31, 2012, the Company had deferred fees and deferred profit from the sale of properties to joint ventures or partnerships of $25.5 million and $29.4 million, respectively, which will be recognized through earnings over the weighted average life of the related properties, upon the disposition of the properties to a third party, or upon completion of certain development obligations.

The Company recognized $3.0 million and $5.7 million and $2.7 million and $5.7 million of management fees during the three and six months ended June 30, 2013 and 2012, respectively, for our management of the joint ventures and partnerships. The management fees are classified in “Joint venture management and other fees” in the Consolidated Statements of Operations.

The Company may, in the future, make additional capital contributions to certain of our joint ventures and partnerships should additional capital contributions be necessary to fund acquisitions or operations.

We evaluate our investments in unconsolidated joint ventures and partnerships when events or changes in circumstances indicate that there may be an other-than-temporary decline in value. We consider various factors to determine if a decrease in the value of the investment is other-than-temporary. The Company did not recognize any other-than-temporary decrease in the value of its investments in unconsolidated joint ventures or partnerships during the three months and six months ended June 30, 2013 and 2012.

Combined summary financial information relating to all of the unconsolidated joint ventures and partnerships operations (not just our proportionate share), is presented below for the three months and six months ended June 30, 2013 and 2012 (dollars in thousands):



	Three Months Ended June 30,					Six Months Ended June 30,
	2013		2012			2013			2012

Revenues	$	62,607	$	74,725		$	123,687		$	137,750
Real estate depreciation and amortization	21,336		26,489			43,114			52,374
Net (income)/loss	23,642		3,544			27,479			(5,077		)
UDR income/(loss) from unconsolidated entities	515		(2,412		)	(2,287		)	(5,103		)

Combined summary balance sheets relating to all of the unconsolidated joint ventures and partnerships (not just our proportionate share) are presented below as of June 30, 2013 and December 31, 2012 (dollars in thousands):



	June 30, 2013		December 31, 2012
Real estate, net	$	3,235,228	$	3,189,814
Total assets	3,303,195		3,266,518
Amount due to UDR	32,731		34,843
Third party debt	1,773,283		1,663,427
Total liabilities	1,846,961		1,747,855
Total equity	1,456,234		1,518,663
Equity held by noncontrolling interest	—		12,755
UDR’s investment in unconsolidated joint ventures, net	533,335		477,631

Consolidated Joint Ventures

In January 2012, the Company formed a joint venture with an unaffiliated third party to acquire 399 Fremont (land for future development) in San Francisco, California. At closing, UDR owned a noncontrolling interest of 92.5% in the joint venture. The Company’s total investment was $55.5 million, which consists of its initial investment of $37.3 million and an option to acquire its partner’s 7.5% ownership interest in the joint venture. In October 2012, the Company exercised the option and paid $13.5 million, resulting in the consolidation of the joint venture at fair value. In January 2013, the Company subsequently acquired its partner's 7.5% ownership interest for $4.7 million.