COMMITMENTS AND CONTINGENCIES (UNITED DOMINION REALTY, L.P.) Commitments and Contingencies (UNITED DOMINION REALTY, L.P.)

9 Months Ended

Sep. 30, 2018

Entity information

COMMITMENTS AND CONTINGENCIES

12. COMMITMENTS AND CONTINGENCIES

Commitments

Real Estate Under Development

The following summarizes the Company’s real estate commitments at September 30, 2018  (dollars in thousands):

		Costs						Average
	Number	Incurred			Expected Costs			Ownership
	Properties	to Date (a)			to Complete			Stake
Wholly-owned — under development	2	$	701,113	(b)	$	14,387		100	%
Joint ventures:
Unconsolidated joint ventures	2		184,209			2,668	(c)	50	%
Preferred equity investments	8		146,246	(d)		65,170	(e)	49	%	(f)
Other investments	1		44,750			8,809	(g)	—	%
Total		$	1,076,318		$	91,034

(a) Represents 100% of project costs incurred as of September 30, 2018 other than for preferred equity investments.

(b) Costs incurred as of September 30, 2018 include $12.9 million of accrued fixed assets for development. 

(c) Represents UDR’s proportionate share of expected remaining costs to complete the developments.

(d) Represents UDR’s investment in the West Coast Development Joint Ventures, 1532 Harrison, 1200 Broadway, Junction, 1300 Fairmount and Essex for the properties under development as of September 30, 2018.

(e) Represents UDR’s remaining commitment for 1532 Harrison, 1200 Broadway, Junction, 1300 Fairmount and Essex.

(f) Represents UDR’s average ownership stake in the West Coast Development Joint Ventures only and does not include UDR’s preferred equity interest in 1532 Harrison, 1200 Broadway, Junction, 1300 Fairmount and Essex.

(g) Represents UDR’s remaining commitment for The Portals and other investment ventures.

Purchase Commitments

As described in Note 5, Joint Ventures and Partnerships, the Company anticipates acquiring one of the communities held by the West Coast Development Joint Ventures in 2019 for a contractual purchase price at 100% of approximately $130.1 million. As the Company currently holds a 49% ownership interest in the community, it expects to pay approximately $66.4 million for the remaining 51% ownership. The community will be consolidated upon closing of the acquisition.

During the nine months ended September 30, 2018, the Company entered into a contract to purchase a $13.2 million development land parcel located in Denver, Colorado. The Company made a $1.0 million deposit on the purchase which, as of September 30, 2018, is generally non-refundable other than due to a failure of closing conditions pursuant to the terms of the agreement. The acquisition is expected to close in the fourth quarter of 2018, subject to customary closing conditions.

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 flows.

United Dominion Reality L.P.

Entity information

COMMITMENTS AND CONTINGENCIES

10. COMMITMENTS AND CONTINGENCIES

Contingencies

Litigation and Legal Matters

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