Investment in Real Estate

The following table summarizes the carrying amounts of our investment in real estate held for disposition (at cost) as of December 31, 2013 and 2012 (amounts in thousands):

Properties Held for Disposition



	December 31, 2013		December 31, 2012
Investment in real estate:
Land	$	—	$	28,611
Land improvements	—		65,664
Buildings and other depreciable property	—		32,591
	—		126,866
Accumulated depreciation	—		(15,077		)
Net investment in real estate	$	—	$	111,789

During the year ended December 31, 2013, we recorded an additional $3.5 million in depreciation expense and accumulated depreciation to correct immaterial amounts recorded in prior periods related to land improvements.

Acquisitions

All acquisitions have been accounted for utilizing the acquisition method of accounting in accordance with FASB ASC 805 and, accordingly, the results of operations of acquired assets are included in the statements of operations from the dates of acquisition. Certain purchase price adjustments may be made within one year following the acquisition and applied retroactively to the date of acquisition.

During the years ended December 31, 2013, 2012 and 2011 we acquired all of the following Properties from unaffiliated third parties (dollars in millions):

1) During the year ended December 31, 2013, we acquired the following Properties:

(a) On December 17, 2013, we closed on the acquisition of Neshonoc Resort, a 284-Site property for a purchase price of approximately $7.3 million funded with available cash and the assumption of mortgage debt of approximately $5.4 million. On January 7, 2014 we closed on the acquisition of Blackhawk Resort, a 490-Site property for a purchase price of $7.6 million funded with available cash and the assumption of mortgage debt of approximately $4.9 million. On January 24, 2014, we closed on the acquisition of Lakeland Resort, a 682-Site property for a purchase price of $16.6 million funded with available cash and the assumption of mortgage debt of approximately $8.4 million.

(b) On September 16, 2013, we acquired Fiesta Key, a resort Property with 324 Sites for a purchase price of approximately $24.6 million funded with available cash.

(c) On August 1, 2013, we acquired from certain affiliates of Riverside Communities three manufactured home communities (the “Riverside Acquisition”) located in the Chicago metropolitan area collectively containing approximately 1,207 Sites for a stated purchase price of $102.0 million. The purchase price was funded with approximately $9.7 million of limited partnership interests in our Operating Partnership, equivalent to 240,969 OP units, and the remainder was funded with available cash.

2) During the year ended December 31, 2012, we acquired two resort Properties with 1,765 Sites for a purchase price of $25.0 million.

3) During the year ended December 31, 2011, we acquired 75 manufactured homes communities and one RV (the “2011 Acquisition Properties”) resort containing 30,129 Sites for a purchase price of approximately $1.5 billion (the “2011 Acquisition”). We funded the purchase price of this closing with (i) the issuance of 3,416,552 shares of our common stock, to the seller with an aggregate value of approximately $111 million, (ii) the issuance of 3,480,000 shares of Series B Preferred Stock to the seller with an aggregate value of approximately $113 million, (iii) the assumption of mortgage debt secured by 35 of the 2011 Acquisition Properties with an aggregate value of approximately $548 million, (iv) the net proceeds of approximately $344 million, net of offering costs, from a common stock offering of 12,075,000 shares, (v) approximately $200 million of cash from the Term Loan we closed on July 1, 2011, and (vi) approximately $200 million of cash from new secured financings originated during the third quarter of 2011. The assumed mortgage debt had stated interest rates ranging from 4.65% to 8.87% per annum and maturities from dates ranging from 2012 to 2023. The number of shares shown in this section has been adjusted for our two-for-one stock split that was effected by and in the form of a stock dividend in July 2013.

We engaged a third-party to assist with our purchase price allocation for the acquisitions. The allocation of the fair values of the assets acquired and liabilities assumed is subject to further adjustment due primarily to information not readily available at the acquisition date and final purchase price settlement with the sellers in accordance with the terms of the purchase agreement. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed in the acquisitions for the year ended December 31, 2013, which we determined using level two and level three inputs (amounts in thousands):



	2013		2012			2011
Assets acquired
Land	$	41,022	$	4,410		$	471,500
Depreciable property	87,306		18,491			855,200
Manufactured homes	1,155		—			24,000
In-place leases	3,910		2,099			74,000
Net investment in real estate	$	133,393	$	25,000		$	1,424,700
Notes receivable	—		—		—	40,000
Other assets	1,025		29			18,300
Total Assets acquired	$	134,418	$	25,029		$	1,483,000
Liabilities assumed
Mortgage notes payable	$	5,382	$	—		$	548,000
Other liabilities	1,777		816			8,000
Total liabilities assumed	$	7,159	$	816		$	556,000
Net consideration paid	$	127,259	$	24,213		$	927,000

Ground lease escrow

We are the beneficiary of an escrow, funded by the seller, related to our Colony Cove Property which was acquired as part of our 2011 Acquisition. The lease terms included an option to purchase the underlying fee interest upon the death of the lessor as well as scheduled increases of the monthly payments and the option purchase price. During 2013, we received distributions of 90,805 shares of our common stock. During the fourth quarter, we learned of the death of the lessor and we have provided the required notification of our intent to exercise the purchase option which is expected to close in early 2014. The December 31, 2013 contingent consideration asset balance of $1.9 million represents the $1.1 million fair value estimate of shares distributed to us on January 1, 2014 and the $0.8 million fair value estimate of shares distributed to us on February 12, 2014.

Dispositions

During the three years ended December 31, 2013, we disposed of the following Properties:

1) On May 8, 2013, we entered into a purchase and sale agreement to sell 11 manufactured home communities located in Michigan (the “Michigan Properties”) collectively containing approximately 5,344 Sites for a net sale price of approximately $165.0 million. We closed on the sale of ten of the Michigan Properties on July 23, 2013, and closed on the sale of the eleventh Michigan Property on September 25, 2013. In accordance with FASB Codification Sub-Topic “Property, Plant and Equipment - Real Estate Sales - Derecognition” (“FASB ASC 360-20-40-5”), we recognized a gain on sale of real estate assets of approximately $40.6 million.

2) On December 7, 2012, we sold Cascade, a 163-Site resort Property located in Snoqualmie, Washington. In accordance with FASB ASC 360-20-40-5, we recognized a gain on disposition of approximately $4.6 million, net of tax for the year ended December 31, 2012. Cash proceeds from the disposition, net of closing costs, were approximately $7.6 million. During the year ended December 31, 2013, we recognized approximately $1.0 million of gain on the sale as a result of a new U.S. Federal tax law that eliminated a previously accrued built-in-gain tax liability related to the disposition.

The following table summarizes the combined results of operations of Properties held for disposition for the respective periods that we owned such assets during the years ended December 31, 2013, 2012 and 2011 (amounts in thousands):



	Years Ended
	December 31,
	2013			2012			2011
Community base rental home income	$	11,565		$	19,564		$	9,621
Rental income	1,948			2,416			725
Utility and other income	1,384			1,961			727
Discontinued property operating revenues	14,897			23,941			11,073
Property operating expenses	6,126			9,561			4,290
Income from discontinued property operations	8,771			14,380			6,783
Loss from home sales operations	(78		)	(110		)	(26		)
Other income and expenses	332			868			566
Interest and amortization	(355		)	(534		)	(179		)
Depreciation and in place lease amortization	(1,537		)	(8,488		)	(6,597		)
Discontinued operations, net	$	7,133		$	6,116		$	547

As of December 31, 2013, we have no Properties designated as held for disposition pursuant to FASB ASC 360-10-35.