Real Estate Owned (UNITED DOMINION REALTY, L.P.)

12 Months Ended

Dec. 31, 2014

Entity Information [Line Items]

REAL ESTATE OWNED

REAL ESTATE OWNED

Real estate assets owned by the Company consist of income producing operating properties, properties under development, land held for future development, and sold or held for sale properties. As of December 31, 2014, the Company owned and consolidated 139 communities in 10 states plus the District of Columbia totaling 39,851 apartment homes. The following table summarizes the carrying amounts for our real estate owned (at cost) as of December 31, 2014 and 2013(dollars in thousands):

	December 31, 2014			December 31, 2013
Land and land improvements	$	1,980,221		$	1,847,127
Depreciable property — held and used:
Building, improvements, and furniture, fixtures and equipment	6,225,406			5,876,717
Under development:
Land	24,584			110,769
Building, improvements, and furniture, fixtures and equipment	153,048			356,644
Real estate held for disposition:
Land	—			10,751
Building, improvements, and furniture, fixtures and equipment	—			5,969
Real estate owned	8,383,259			8,207,977
Accumulated depreciation	(2,434,772		)	(2,208,794		)
Real estate owned, net	$	5,948,487		$	5,999,183

During the year ended December 31, 2014, the Company sold nine communities consisting of a total of 2,500 apartment homes, an adjacent parcel of land, and one operating property for gross proceeds of $328.4 million, resulting in net proceeds of $324.4 million and a total gain, net of tax, of $138.6 million. A portion of the sale proceeds was designated for tax-deferred exchanges under Section 1031 of the Internal Revenue Code and was used to fund acquisitions of real estate as discussed below.

In December 2014, the Company sold a 49% interest in 13th and Market and a 50% interest in 3033 Wilshire to MetLife for approximately $54.2 million and $8.3 million, respectively, and recognized, net of tax, a gain of $7.2 million and a loss of $2.2 million, respectively. Subsequent to the sale, the two communities are accounted for under the equity method of accounting and are included in Investment in and advances to unconsolidated joint ventures, net on the Consolidated Balance Sheets. See further discussion of this transaction in Note 5, Joint Ventures and Partnerships. The activity of the two communities prior to sale is classified as a component of continuing operations on the Consolidated Statements of Operations.

In 2014, the Company acquired a fully-entitled land parcel for future development located in Huntington Beach, California for $77.8 million, two communities, located in Seattle, Washington and Kirkland, Washington, with a total of 358 apartment homes for $45.5 million and $75.2 million, respectively, a land parcel for future development located in Boston, Massachusetts for $32.2 million. The four acquisitions during the year ended December 31, 2014 were accomplished through tax-deferred exchanges under Section 1031 of the Internal Revenue Code.

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 recently completed development community in lease-up with 391 apartment homes, and 28.4 acres of developable land parcels. The transaction resulted in a gain of approximately $436,000 which the Company has deferred until the terms of the construction completion guarantee have been met. The UDR/MetLife Vitruvian Park^® Partnerships are accounted for under the equity method of accounting and are included in Investment In and Advances To Unconsolidated Joint Ventures, Net on the Consolidated Balance Sheets. See further discussion of this transaction in Note 5, Joint Ventures and Partnerships.

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 has continuing involvement over the duration of the partnership.

In December 2013, the Company sold a 49% interest to MetLife in the Company’s fully-entitled 399 Fremont land parcel located in San Francisco, California for approximately $29.9 million. In conjunction with the sale, the Company formed a new unconsolidated joint venture, UDR/MetLife 399 Fremont, to develop a $318 million, 447-home, luxury high-rise tower on the site. As the Company recently acquired the 399 Fremont land parcel, the sale price was equivalent to the cost basis resulting in no gain or loss on the transaction. For more information on this transaction see Note 5, Joint Ventures and Partnerships.

In December 2013, the Company became the managing partner of two joint ventures resulting in consolidation of both and increasing the real estate owned by $129.4 million. See Note 5, Joint Ventures and Partnerships, for further details.

The Company incurred $373,000, $59,000 and $2.3 million of acquisition-related costs during the years ended December 31, 2014, 2013, and 2012, respectively. These expenses are reported within the line item General and Administrative on the Consolidated Statements of Operations.

In February 2015, the Company acquired an office building in Highlands Ranch, Colorado, for total consideration of approximately $24.0 million, which was comprised of assumed debt. The Company’s corporate offices, as well as other leased office space, are located in the acquired building. The building consists of approximately 120,000 square feet, of which UDR occupies approximately 44,000 square feet. All existing leases were assumed by the Company at the time of the acquisition.

United Dominion Reality L.P.

Entity Information [Line Items]

REAL ESTATE OWNED

REAL ESTATE OWNED

Real estate assets owned by the Operating Partnership consists of income producing operating properties, properties under development, land held for future development, and sold or held for sale properties. At December 31, 2014, the Operating Partnership owned and consolidated 68 communities in nine states plus the District of Columbia totaling 20,814 apartment homes. The following table summarizes the carrying amounts for our real estate owned (at cost) as of December 31, 2014 and 2013(dollars in thousands):

	December 31, 2014			December 31, 2013
Land	$	1,008,014		$	1,004,447
Depreciable property — held and used:
Buildings, improvements, and furniture, fixtures and equipment	3,230,756			3,103,970
Under development:
Land	—			9,447
Construction in progress	—			70,616
Real estate owned	4,238,770			4,188,480
Accumulated depreciation	(1,403,303		)	(1,241,574		)
Real estate owned, net	$	2,835,467		$	2,946,906

The Operating Partnership had no acquisitions during the years ended December 31, 2014, 2013 and 2012.

During the year ended December 31, 2014, the Operating Partnership sold one community and an adjacent parcel of land in San Diego, California for gross proceeds of $48.7 million, resulting in a $24.4 million gain and net proceeds of $47.9 million. The Operating Partnership also recorded a gain of $39.2 million in connection with the sale of two communities, one in Tampa, Florida and one in Los Angeles, California, which was previously deferred. The total gains of $63.6 million were included in Gain/(loss) on sale of real estate ownedon the Consolidated Statements of Operations.

In November 2013, the Operating Partnership distributed the development property Los Alisos to the General Partner. See Note 6, Related Party Transactions, for more details.