5	ACQUISITIONS AND DEVELOPMENT

Property Acquisitions

During the years ended December 31, 2011 and 2010, the Company acquired the communities listed below:


Apartment Community	Market Area	Date Acquired		Year Constructed	Number of Units		Cost of Acquisition		Cost of Acquisition Per Unit
Middlebrooke Apartments	Baltimore		4/1/2010	1974-1977		208	$	17,350	$	83
Westbrooke Apartments	Baltimore		4/1/2010	1961-1970		110		6,350		58
Annapolis Roads Apartments⁽¹⁾	Baltimore		6/17/2010	1974-1979		282		32,500		115
The Greens at Columbia	Baltimore		7/29/2010	1986-1987		168		25,600		152
Village at Potomac Falls	Suburban D.C.		8/5/2010	1999		247		38,500		156
Charleston Place	Baltimore		9/30/2010	1971-1983		858		103,000		120
The Courts at Fair Oaks	Suburban D.C.		9/30/2010	1990		364		70,100		193
Crescent Club Apartments	Long Island		9/30/2010	1973		257		31,250		122
Lakeview Townhomes	Chicago		10/18/2010	1996		120		14,475		121
Hunters Glen	Suburban D.C.		4/19/2011	1984		108		7,000		65
Waterview Apartments	Philadelphia		7/14/2011	1968		203		24,600		121
The Commons at Haynes Farm	Boston		7/15/2011	1991		302		40,500		134
The Apts at Cambridge Court	Baltimore		8/23/2011	1999-2002		544		90,400		166
Somerset Apartments	Suburban D.C.		10/11/2011	2006		108		20,250		188
Newport Village	Suburban D.C.		10/17/2011	1969		937		205,000		219
The Courts at Dulles	Suburban D.C.		11/30/2011	2000		411		92,750		226
The Gates of Deer Grove	Chicago		12/15/2011	1974		204		20,200		99

⁽¹⁾

This apartment community was fee-managed by the Company prior to acquisition.

All of the 2011 and 2010 acquired apartment communities were recorded at fair value which approximated actual purchase price. None of the acquisitions were subject to bargain purchase options or resulted in goodwill being recorded. In connection with these acquisitions, closing costs of $3,219 and $2,871 were incurred and are included in other expenses for the years ended December 31, 2011 and 2010, respectively.

Included in the consolidated statements of income for the year ended December 31, 2011 and 2010, are total revenues of $49,763 and $12,831, respectively, and net income attributable to common shareholders of $9,098 and $2,018, respectively, since the respective date of acquisition through December 31, 2011 for the 2011 and 2010 acquired apartment communities.

Pro forma information

The following unaudited pro forma information was prepared as if the 2011 and 2010 transactions related to the acquisition of apartment communities occurred as of January 1, 2010. The pro forma financial information is based upon the historical consolidated financial statements of the Company and the acquired communities and is not necessarily indicative of the consolidated results which actually would have occurred if the transactions had been consummated at January 1, 2010, nor does it purport to represent the results of operations for future periods. Adjustments to the pro forma financial information for the year ended December 31, 2011 and 2010 consist principally of providing net operating activity and recording interest, depreciation and amortization from January 1, 2010 to the acquisition date as appropriate.


	2011		2010
Pro forma total revenues	$	613,013	$	583,708
Pro forma net income attributable to common stockholders		41,112		25,285
Pro forma earnings per common share:
Basic		0.98		0.69
Diluted		0.97		0.68

Development

During 2007, the Company started construction on a project in Silver Spring, Maryland (1200 East West), a 14-story high rise with 247 apartment units and 10,600 square feet of retail space. During 2010, the Company completed construction and placed into service all 247 apartment units. The total cost for this community was $82,976 for an average cost per apartment unit of $329.

During 2008, the Company started construction on a project located in Alexandria, Virginia, consisting of four, four-story buildings with 421 units (Courts at Huntington Station). As of December 31, 2010, two buildings with 202 units were completed and construction in progress for this development was $83,640. During 2011, the Company completed construction and placed into service the remaining 219 apartment units. The total cost for this community was $121,931 for an average cost per apartment unit of $289.

During the first quarter of 2011, the Company started construction on a project located in Fredericksburg, Virginia, consisting of eight, four-story buildings and a refurbished rail depot for a total of 314 apartment units (The Apartments at Cobblestone Square). In the fourth quarter of 2011, construction of the first apartment building, along with the rail depot renovation and amenities, was completed and 51 apartment units were placed into service. Construction of the other buildings has begun and the entire project is expected to be completed in the first half of 2012. The construction in progress for this development was $25,596 as of December 31, 2011.

During the fourth quarter of 2011, the Company started construction on a project located in Silver Spring, Maryland, consisting of two buildings, a 21 story high-rise and a 5 story mid-rise, for a total of 379 apartment units (Eleven55 Ripley). Construction is expected to be completed in 2014 with initial occupancy in the third quarter of 2013. The construction in progress for this development, consisting mostly of land value, was $25,476 as of December 31, 2011.

During the fourth quarter of 2011, the Company purchased a land parcel located in Conshohocken, Pennsylvania, a suburb of Philadelphia. The 385 apartment unit project (Courts at Spring Mill Station) is on entitled land and construction is expected to begin in the first half of 2012. The construction in progress for this development, consisting mostly of land value, was $13,129 as of December 31, 2011.

Redevelopment

The Company has one project in the redevelopment phase. Arbor Park, located in Alexandria, Virginia, currently has 851 garden apartments in fifty-two buildings built in 1967. The Company plans to extensively renovate all of the units over the next four years on a building by building basis. As of December 31, 2011, there were five buildings with 52 units under renovation and eleven buildings with 128 units completed and 103 units occupied.

The Company has one project in the pre-redevelopment phase. Falkland Chase, located in Silver Spring, Maryland, currently has 450 garden apartments constructed between 1936 and 1939. The Company is planning on redeveloping the North parcel consisting of 182 units, which will be renamed Falkland North. The Company is making progress on the design and obtaining the necessary approvals to redevelop this parcel. The cost associated with this project was $4,591 as of December 31, 2011 and is included in other assets.

Acquisition of Notes Receivable

On September 22, 2010, the Company purchased two non-performing mortgage notes from a community bank for $1,433 in an arm's length transaction. Both notes were in default. They were purchased at face value plus accrued interest and late fees and were collateralized by real property. One of the notes, originally purchased by the Company for $1,015, was repaid in its entirety on January 28, 2011. The remaining note, purchased for $418 is collateralized by vacant land. In accordance with authoritative guidance, the Company will recognize impairment to the extent the fair value of the collateral is less than the carrying amount of the investment in the note receivable. Interest income, if any, will be recognized on the cost recovery method. As of December 31, 2011, there was no impairment recognized and no interest income recorded on the remaining note. The remaining note receivable of $429 as of December 31, 2011 is included in other assets.