DISPOSITION OF REAL ESTATE AND DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 2015

DISPOSITION OF REAL ESTATE AND DISCONTINUED OPERATIONS

DISPOSITION OF REAL ESTATE AND DISCONTINUED OPERATIONS

10DISPOSITION OF REAL ESTATE AND DISCONTINUED OPERATIONS

As discussed in Note 2, on January 1, 2015, the Company prospectively adopted ASU 2014-08 which raises the threshold for determining which disposals are required to be presented as discontinued operations.  ASU 2014-08 states that only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results should be reported as discontinued operations in the financial statements.  The Company believes that routine sales of apartment communities generally will not meet the requirements for reporting within discontinued operations under ASU 2014-08.  Prior to the adoption of ASU 2014-08, the Company reported its property dispositions as discontinued operations as prescribed by the former guidance which, assuming no significant continuing involvement by the former owner after the sale, considered the sale of an apartment community as a discontinued operation.  In addition, apartment communities classified as held for sale were also considered discontinued operations.  The Company generally considered assets to be held for sale when all significant contingencies surrounding the closing had been resolved, which often corresponded with the actual closing date.

Disposition of Real Estate

During the first quarter of 2015, the Company sold two communities in separate transactions (the “2015 Disposed Communities”).  A summary of the 2015 Disposed Communities recorded as continuing operations is as follows:

Apartment Community	Region	Date Sold	Number of Units		Sales Price			Gain on Sale
The New Colonies	Chicago	1/26/2015		672		$	49,318		$	27,524
The Coves at Chesapeake	Baltimore	3/25/2015		469		76,250			12,822
				1,141		$	125,568		$	40,346

The results of operations for the 2015 Disposed Communities are included in continuing operations in the consolidated statements of operations.  The gain on disposition of the 2015 Disposed Communities is included in gain on disposition of property within income from continuing operations in the consolidated statements of operations.  The following is a summary of the 2015 Disposed Communities for the three months ended March 31, 2015 and 2014:

	Three Months Ended March 31,
	2015		2014
Revenues:
Rental income	$	2,076	$	3,170
Property other income	354		337
Total revenues	2,430		3,507
Expenses:
Operating and maintenance	745		1,327
Depreciation and amortization	421		960
Total expenses	1,166		2,287
Income from continuing operations, before gain on disposition of real estate	$	1,264	$	1,220
Gain on disposition of property	$	40,346	$	-

Discontinued Operations

Included in discontinued operations for the three months ended March 31, 2014 are the operating results of three apartment communities sold in separate transactions during the year ended December 31, 2014 (“2014 Disposed Communities”).  For purposes of the discontinued operations presentation, the Company only includes interest expense and losses from early extinguishment of debt associated with specific mortgage indebtedness of the properties that are sold or held for sale.

A summary of the 2014 Disposed Communities recorded as discontinued operations is as follows:

Apartment Community	Region	Date Sold	Number of Units		Sales Price			Gain on Sale
Cider Mill	Washington, D.C.	2/26/2014		864		$	110,000		$	31,305
Woodleaf	Washington, D.C.	12/19/2014		228		33,500			14,297
The Manor - MD	Washington, D.C.	12/29/2014		435		73,300			36,229
				1,527		$	216,800		$	81,831

The results of discontinued operations are summarized for the three months ended March 31, 2014 as follows:

	Three Months Ended
Revenues:	March 31, 2014
Rental income		$	4,533
Property other income		525
Total revenues		5,058
Expenses:
Operating and maintenance		1,779
Interest expense (1)		1,584
Depreciation and amortization		861
Total expenses		4,224
Income (loss) from discontinued operations		834
Gain on disposition of property		31,306
Discontinued operations		$	32,140

(1) Includes debt extinguishment costs of $802 incurred as a result of repaying property specific debt triggered upon sale for the three months ended March 31, 2014.