NONCONTROLLING INTERESTS

Noncontrolling Redeemable Interest

In 1998, in conjunction with the acquisition of an operating partnership that owned two apartment communities, one of which was sold in October 2005, we issued a total of 522,032 operating partnership units ("OP units"). Holders of OP units were entitled to receive cumulative distributions per OP unit equal to the per share distributions on our common shares. When the OP units were presented for redemption, we were obligated to redeem those OP units for either common shares exchangeable on a one-for-one basis, or the cash equivalent amount, determined as the average closing price for our common shares over the 20-day period preceding the redemption, at our option. On October 23, 2013, we consummated a subsidiary merger transaction that had the effect of converting the remaining 74,083 OP units into a right to receive cash merger consideration, pursuant to which we paid $1.4 million on November 6, 2013. As of December 31, 2013, there were no remaining OP units as all remaining units had been redeemed for cash or canceled in the merger. No OP units were redeemed during the six months ended June 30, 2013.

Activity related to the noncontrolling redeemable interest is as follows:



	Three Months Ended			Six Months Ended
	June 30,			June 30,
(In thousands)	2013			2013
Balance at beginning of period	$	1,734		$	1,734
Net income attributable to noncontrolling redeemable interest	14			28
Distribution to noncontrolling redeemable interest	(14		)	(28		)
Balance at end of period	$	1,734		$	1,734

Noncontrolling Interests

On July 14, 2011, we entered into a partnership agreement with Keating Project Development, Inc., an unrelated third-party, pursuant to which we hold a 97.0% equity interest in the partnership. In March 2012, the partnership acquired a 2.5-acre parcel of land in Bethesda, Maryland for $12.2 million on which it is developing 140 apartment units and 7,000 square feet of commercial space. We have determined that this entity is not a variable interest entity and that we hold a controlling interest in the entity. As such, this entity is included in our consolidated financial statements. We have also determined that the noncontrolling interest in this entity meets the criteria to be classified as a component of permanent equity.

On September 24, 2010, we entered into a partnership agreement with Bristol Development Group, an unrelated third-party, for the development of Vista Germantown, a 242-unit apartment community located in downtown Nashville, Tennessee. We contributed $9.4 million to the partnership and held a 90.0% equity interest in the partnership. In February 2013, we funded the redemption of the interest of the minority 10.0% partner of this partnership for $4.5 million, as a result of which we owned a 100% interest in Vista Germantown as of February 2013. On April 2, 2014, we disposed of Vista Germantown for a sales price of $53.3 million.

The following table provides details of the activity related to the noncontrolling interests:



	Six Months Ended
	June 30,
(In thousands)	2014		2013
Balance at beginning of period	$	350	$	1,344
Net income	—		3
Purchase of noncontrolling interest	—		(997		)
Balance at end of period	$	350	$	350

The following table provides details of the activity related to changes in ownership of noncontrolling interests:



	Six Months Ended
	June 30,
	2014		2013
Net income attributable to AERC	$	104,621	$	11,984
Decrease in equity for purchase of noncontrolling interest	—		(3,547		)
Change from net income attributable to AERC and net
transfers to noncontrolling interest	$	104,621	$	8,437