Goodwill and Other Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Our goodwill was allocated to our properties on a relative fair value basis. Upon disposition of properties, the goodwill allocated is included in the calculation of the gain or loss on disposal and subsequently written-off. During the year ended December 31, 2013, we wrote-off $217,000 of our goodwill as a result of property dispositions. The carrying value of our goodwill as of December 31, 2013 and December 31, 2012, was $1.5 million and $1.7 million, respectively. Our annual review of goodwill impairment is completed during the first quarter of each year and more frequently, if events or changes in circumstances indicate that the carrying value may not be recoverable. The review that was completed during the three months ended March 31, 2013, determined that goodwill was not impaired and no other events have occurred that would require goodwill to be reevaluated. In performing this analysis, we compare the net assets of each property on which goodwill has been allocated, including the amount of allocated goodwill, to its estimated fair market value. Should the estimates used to determine the fair value of the properties change, impairment may result which could materially impact our results of operations for the period in which it is recorded.

Other Assets, Net

Other assets, net, consist of the following:



	December 31,
(In thousands)	2013			2012
Intangible assets	$	9,834		$	8,985
Less: accumulated amortization	(6,093		)	(4,888		)
	3,741			4,097
Prepaid expenses	4,029			3,977
Deferred financing costs, net	8,559			6,485
Deposits on potential future acquisitions	17,943			4,500
Other assets	3,687			2,384
	$	37,959		$	21,443

Property Acquisitions. We allocate a portion of the total purchase price of a property acquisition to any intangible assets identified, such as existing leases and tenant relationships. The intangible assets are amortized over the remaining lease terms or estimated life of the tenant relationship, which is approximately 12 months. Due to the short term nature of residential leases, we believe that existing lease rates approximate market rates; therefore, no allocation is made for above/below market leases. The intangible assets associated with one commercial lease are being amortized over the life of the lease, which is 60 months. See "Legal Proceedings" presented in Part I, Item 3 of this report on Form 10-K for additional information related to this lease.

In connection with five multifamily property acquisitions completed during 2013, as discussed in Note 3, we recorded total intangible assets in the amount of $3.5 million related to existing leases and tenant relationships, which are being amortized over 12 months.

In connection with four multifamily property acquisitions completed during 2012, as discussed in Note 3, we recorded total intangible assets in the amount of $4.4 million related to existing leases and tenant relationships, which are being amortized over 12 months.

In connection with one acquisition completed during 2012, as discussed in Note 3, we recorded an intangible asset in the amount of $1.9 million related to one commercial lease, which is being amortized over the 60-month life of the lease.

Our intangible assets related to existing leases and tenant relationships consist of the following:



(In thousands)	December 31,
	2013			2012
Gross carrying amount	$	9,834		$	8,985
Less: accumulated amortization	(6,093		)	(4,888		)
	$	3,741		$	4,097

The aggregate intangible asset amortization expense for the years ended December 31, 2013, 2012 and 2011 was $3.9 million, $4.9 million and $8.0 million, respectively.

As of December 31, 2013, the scheduled amortization for each of the next five years are as follows (in thousands):



2014	$	2,854
2015	374
2016	374
2017	139
2018	—
	$	3,741

Gross deferred tax assets of $6.9 million at December 31, 2013 and 2012 are also included in intangible assets. See Note 10 for additional information related to income taxes.

Deferred Financing Costs

Amortization expense for deferred financing costs, including amortization classified in income from discontinued operations, was $2.0 million, $2.1 million and $2.0 million for the years ended December 31, 2013, 2012 and 2011, respectively.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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