Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Commitments

Real Estate Under Development

The following summarizes the Company’s real estate commitments at December 31, 2014 (dollars in thousands):

	Number of Properties	Costs Incurred to Date (a)			Expected Costs to Complete (unaudited)			Average Ownership Stake
Wholly-owned — under development	1	$	177,632	(b)	$	40,068		100	%
Wholly-owned — redevelopment	1	83,778		(b)	14,222			100	%
Joint ventures:
Unconsolidated joint ventures	3	225,013			172,155		(c)	Various
Participating loan investments	1	62,707		(d)	29,302		(e)	0	%
Total		$	549,130		$	255,747

(a) Represents 100% of project costs incurred to date.

(b) Costs incurred to date include $14.7 million and $1.8 million of accrued fixed assets for development and redevelopment, respectively.

(c) Represents UDR’s contributed and remaining equity commitment in unconsolidated joint ventures.

(d) Represents the participating loan balance funded as of December 31, 2014.

(e) Represents UDR’s remaining participating loan commitment for Steele Creek.

Ground and Other Leases

UDR owns six communities which are subject to ground leases expiring between 2019 and 2103. In addition, UDR is a lessee to various operating leases related to office space rented by the Company with expiration dates through 2016. Future minimum lease payments as of December 31, 2014 are as follows (dollars in thousands):

	Ground Leases (a)		Office Space
2015	$	5,412	$	709
2016	5,412		124
2017	5,412		76
2018	5,412		76
2019	5,412		76
Thereafter	313,735		109
Total	$	340,795	$	1,170

(a) For purposes of our ground lease contracts, the Company uses the minimum lease payment, if stated in the agreement. For ground lease agreements where there is a reset provision based on the communities appraised value or consumer price index but does not include a specified minimum lease payment, the Company uses the current rent over the remainder of the lease term.

UDR incurred $5.4 million, $5.2 million, $5.1 million of ground rent expense for the years ended December 31, 2014, 2013, and 2012, respectively. These costs are reported within the line item Other Operating Expenses on the Consolidated Statements of Operations. The Company incurred $1.3 million, $1.3 million, $1.1 million of rent expense related to office space for the years ended December 31, 2014, 2013, and 2012, respectively. These costs are included in General and Administrative on the Consolidated Statements of Operations. In February 2015, the Company acquired the office building in Highlands Ranch, Colorado, which housed its corporate offices it had previously leased. See Note 4, Real Estate Owned, for additional details.

Contingencies

Litigation and Legal Matters

The Company is subject to various legal proceedings and claims arising in the ordinary course of business. The Company cannot determine the ultimate liability with respect to such legal proceedings and claims at this time. The Company believes that such liability, to the extent not provided for through insurance or otherwise, will not have a material adverse effect on our financial condition, results of operations or cash flow.