INDEPENDENCE REALTY TRUST, INC (Form: 10-Q, Received: 11/07/2014 16:36:22)

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Non-Accelerated filer

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-36041

INDEPENDENCE REALTY TRUST, INC.

(Exact Name of Registrant as Specified in Its Charter)


Maryland		26-4567130
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

Cira Centre 2929 Arch St., 17th Floor Philadelphia, PA		19104
(Address of Principal Executive Offices)		(Zip Code)

(215) 243-9000

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of November 6, 2014 there were 25,801,540 shares of the Registrant’s common stock issued and outstanding.

INDEPENDENCE REALTY TRUST, INC.

INDEX


		Page

PART I—FINANCIAL INFORMATION			3

Item 1.	Financial Statements (unaudited)		3

	Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013		3

	Consolidated Statements of Operations for the Three-Month and Nine-Month Periods ended September 30, 2014 and September 30, 2013		4

	Consolidated Statements of Changes in Equity for the Nine-Month Period ended September 30, 2014		5

	Consolidated Statements of Cash Flows for the Nine-Month Periods ended September 30, 2014 and September 30, 2013		6

	Condensed Notes to Consolidated Financial Statements as of September 30, 2014 (unaudited)		7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		27

Item 4.	Controls and Procedures		28

PART II—OTHER INFORMATION			28

Item 1.	Legal Proceedings		28

Item 1A.	Risk Factors		28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		28

Item 3.	Defaults Upon Senior Securities		28

Item 4.	Mine Safety Disclosures		28

Item 5.	Other Information		28

Item 6.	Exhibits		28

Signatures			29

PART I—FINANCIAL INFORMATION

Item 1.

Financial Statements

Independence Realty Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited and dollars in thousands, except share and per share data)


	As of September 30, 2014			As of December 31, 2013
ASSETS:
Investments in real estate:
Investments in real estate at cost	$	444,050		$	190,096
Accumulated depreciation		(20,848	)		(15,775	)

Investments in real estate, net		423,202			174,321
Cash and cash equivalents		34,786			3,334
Restricted cash		4,870			1,122
Accounts receivable and other assets		2,748			1,731
Intangible assets, net of accumulated amortization of $3,495 and $569, respectively		1,327			517
Deferred costs, net of accumulated amortization of $386 and $151, respectively		2,090			846

Total Assets	$	469,023		$	181,871

LIABILITIES AND EQUITY:
Indebtedness	$	253,833		$	103,303
Accounts payable and accrued expenses		7,407			2,374
Accrued interest payable		30			63
Dividends payable		1,567			515
Other liabilities		1,205			708

Total Liabilities		264,042			106,963

Equity:
Stockholders’ equity:
Preferred stock, $0.01 par value; 50,000,000 shares authorized, 0 and 0 shares issued and outstanding, respectively		—			—
Common stock, $0.01 par value; 300,000,000 shares authorized, 25,801,540 and 9,652,540 shares issued and outstanding, including 40,000 unvested restricted common share awards, as of September 30, 2014		258			96
Additional paid-in capital		213,006			78,112
Retained earnings (accumulated deficit)		(11,560	)		(3,300	)

Total shareholders’ equity		201,704			74,908
Noncontrolling interests		3,277			—

Total Equity		204,981			74,908

Total Liabilities and Equity	$	469,023		$	181,871

The accompanying notes are an integral part of these consolidated financial statements.

Independence Realty Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited and dollars in thousands, except share and per share data)


	For the Three-Month Periods Ended September 30						For the Nine-Month Periods Ended September 30
	2014			2013			2014			2013
REVENUE:
Rental income	$	11,872		$	4,259		$	29,838		$	12,655
Tenant reimbursement income		505			225			1,307			668
Other income		680			303			1,696			852

Total revenue		13,057			4,787			32,841			14,175
EXPENSES:
Property operating expenses		6,152			2,414			15,725			6,820
General and administrative expenses		248			103			794			374
Asset management fees		445			4			1,092			165
Acquisition expenses		687			50			1,201			50
Depreciation and amortization expense		3,309			1,008			8,664			3,107

Total expenses		10,841			3,579			27,476			10,516

Operating income		2,216			1,208			5,365			3,659
Interest expense		(2,281	)		(906	)		(5,510	)		(2,693	)
Interest income		7			—			12			—
Gain (loss) on assets		—			—			2,882			—

Net income (loss):		(58	)		302			2,749			966
Income allocated to preferred shares		—			(2	)		—			(10	)
(Income) loss allocated to noncontrolling interest		2			(45	)		2			(649	)

Net income (loss) allocable to common shares	$	(56	)	$	255		$	2,751		$	307

Earnings (loss) per share:
Basic	$	0.00		$	0.03		$	0.14		$	0.08

Diluted	$	0.00		$	0.03		$	0.14		$	0.08

Weighted-average shares:
Basic		24,011,540			7,643,540			19,004,591			3,875,331

Diluted		24,011,540			7,643,540			19,040,301			3,875,331

The accompanying notes are an integral part of these consolidated financial statements.

Independence Realty Trust, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity

(Unaudited and dollars in thousands, except share information)


	Common Shares		Par Value Common Shares		Additional Paid In Capital		Retained Earnings (Deficit)			Total Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance, January 1, 2014		9,652,540	$	96	$	78,112	$	(3,300	)	$	74,908		$	—		$	74,908
Net income (loss)		—		—		—		2,751			2,751			(2	)		2,749
Common dividends declared		—		—		—		(11,011	)		(11,011	)		—			(11,011	)
Stock compensation expense		49,000		1		174		—			175			—			175
Common shares issued, net		16,100,000		161		134,720		—			134,881			—			134,881
Issuance of noncontrolling interests		—		—		—		—			—			3,363			3,363
Distributions to noncontrolling interests		—		—		—		—			—			(84	)		(84	)

Balance, September 30, 2014		25,801,540	$	258	$	213,006	$	(11,560	)	$	201,704		$	3,277		$	204,981

The accompanying notes are an integral part of these consolidated financial statements.

Independence Realty Trust, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited and dollars in thousands)


	For the Nine-Month Periods Ended September 30
	2014			2013
Cash flows from operating activities:
Net income (loss)	$	2,749		$	966
Adjustments to reconcile net income (loss) to cash flow from operating activities:
Depreciation and amortization		8,664			3,107
Amortization of deferred financing costs and debt premiums		(478	)		54
Share based compensation		175			—
(Gain) loss on assets		(2,882	)		—
Changes in assets and liabilities:
Accounts receivable and other assets		(78	)		(632	)
Accounts payable and accrued expenses		2,415			218
Accrued interest payable		(33	)		0
Other liabilities		(35	)		13

Net cash from operating activities		10,497			3,726
Cash flows from investing activities:
Acquisition of real estate properties		(178,158	)		(13,020	)
Capital expenditures		(2,522	)		(1,130	)
(Increase) decrease in restricted cash		(3,427	)		74

Net cash from investing activities		(184,107	)		(14,076	)
Cash flows from financing activities:
Debt borrowings		100,917			—
Debt repayments		(20,618	)		(129	)
Proceeds from issuance of common stock		134,881			31,461
(Payments) reimbursements for deferred financing costs		(75	)		(102	)
Redemption of preferred shares		—			(137	)
Redemption of noncontrolling interests		—			(3,500	)
Distributions on common stock		(9,981	)		(1,435	)
Distributions on preferred stock		—			(10	)
Distributions to noncontrolling interests		(62	)		(1,805	)

Net cash from financing activities		205,062			24,343

Net change in cash and cash equivalents		31,452			13,993
Cash and cash equivalents, beginning of period		3,334			2,533

Cash and cash equivalents, end of the period	$	34,786		$	16,526

Supplemental cash flow information:
Cash paid for interest	$	6,022		$	2,641
Non cash decrease in noncontrolling interest from conversion of common limited partnership units to share of common stock	$	—		$	43,585
Mortgage debt assumed	$	66,963		$	—

The accompanying notes are an integral part of these consolidated financial statements.

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

NOTE 1: Organization

Independence Realty Trust, Inc. was formed on March 26, 2009 as a Maryland corporation that has elected to be taxed as a real estate investment trust, or REIT, commencing with the taxable year ended December 31, 2011. We are externally managed by a subsidiary of RAIT Financial Trust, or RAIT, a publicly traded Maryland REIT whose common shares are listed on the New York Stock Exchange under the symbol “RAS.” As used herein, the terms “we,” “our” and “us” refer to Independence Realty Trust, Inc. and, as required by context, Independence Realty Operating Partnership, LP, which we refer to as our operating partnership, and their subsidiaries. We own apartment properties in geographic submarkets that we believe support strong occupancy and have the potential for growth in rental rates. We seek to provide stockholders with attractive risk-adjusted returns, with an emphasis on distributions and capital appreciation. We own substantially all of our assets and conduct our operations through our operating partnership, of which we are the sole general partner.

As of September 30, 2014, we owned 22 properties with 6,470 units located in 12 states.

NOTE 2: Summary of Significant Accounting Policies

a. Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared by management in accordance with U.S. generally accepted accounting principles, or GAAP. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although we believe that the included disclosures are adequate to make the information presented not misleading. The unaudited interim consolidated financial statements should be read in conjunction with our audited financial statements as of and for the year ended December 31, 2013 included in our Annual Report on Form 10-K. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position and consolidated results of operations and cash flows are included. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year.

b. Principles of Consolidation

The consolidated financial statements reflect our accounts and the accounts of our operating partnership and other wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

c. Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

d. Investments in Real Estate

Allocation of Purchase Price of Acquired Assets

We account for acquisitions of properties that meet the definition of a business pursuant to FASB ASC Topic 805, “Business Combinations”. The fair value of the real estate acquired is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases for acquired in-place leases and the value of tenant relationships, based in each case on their fair values. Purchase accounting is applied to assets and liabilities associated with the real estate acquired. Transaction costs and fees incurred related to acquisitions are expensed as incurred. Transaction costs and fees incurred related to the financing of an acquisition are capitalized and amortized over the life of the loan.

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

Upon the acquisition of properties, we estimate the fair value of acquired tangible assets (consisting of land, building and improvements) and identified intangible assets and liabilities (consisting of above and below-market leases, in-place leases and tenant relationships), and assumed debt at the date of acquisition, based on the evaluation of information and estimates available at that date. Based on these estimates, we allocate the initial purchase price to the applicable assets and liabilities. As final information regarding fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments will be made to the purchase price allocation, in no case later than twelve months of the acquisition date. We did not make any adjustments to the purchase price allocation during the three and nine-month periods ended September 30, 2014.

In determining the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease. The capitalized above-market lease values and the capitalized below-market lease values are amortized as an adjustment to rental income over the lease term. We did not acquire any above-market or below-market in-place leases during the three and nine-month periods ending September 30, 2014.

The aggregate value of in-place leases is determined by evaluating various factors, including an estimate of carrying costs during the expected lease-up periods, current market conditions and similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates costs to execute similar leases including leasing commissions, legal and other related costs. The value assigned to this intangible asset is amortized over the assumed lease up period, typically six months For the three and nine-month periods ended September 30, 2014 we recorded $983 and $2,927 of amortization expense for intangible assets, respectively. For the three and nine-month periods ended September 30, 2013 we recorded $39 and $275 of amortization expense for intangible assets, respectively. As of September 30, 2014, we expect to record additional amortization expense on current in-place lease intangible assets of $805 and $522 for the remainder of 2014 and 2015, respectively.

Impairment of Long-Lived Assets

Management evaluates the recoverability of its investment in real estate assets, including related identifiable intangible assets, in accordance with FASB ASC Topic 360, “Property, Plant and Equipment”. This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that recoverability of the assets is not assured.

Management evaluates the long-lived assets on an ongoing basis and records an impairment charge when there is an indicator of impairment. The estimated cash flows used for the impairment analysis and the determination of estimated fair value are based on our plans for the respective assets and our views of market and economic conditions. The estimates consider matters such as current and historical rental rates, occupancies for the respective and/or comparable properties, and recent sales data for comparable properties. Changes in estimated future cash flows due to changes in our plans or views of market and economic conditions could result in recognition of impairment losses, which, under the applicable accounting guidance, could be substantial.

Depreciation and Amortization Expense

Depreciation expense for real estate assets is computed using a straight-line method based on a life of 40 years for buildings and improvements and five to ten years for equipment and fixtures. Expenditures for tenant improvements are capitalized and amortized over the initial term of each lease. For the three and nine-month periods ended September 30, 2014 we recorded $2,326 and $5,737 of depreciation expense, respectively. For the three and nine-month periods ended September 30, 2013 we recorded $967 and $2,831 of depreciation expense, respectively.

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

e. Fair Value of Financial Instruments

In accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures”, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity for disclosure purposes. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their value. Hierarchical levels, as defined in FASB ASC Topic 820, “Fair Value Measurements and Disclosures” and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities, are as follows:

•

Level 1 : Valuations are based on unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. The types of assets carried at level 1 fair value generally are equity securities listed in active markets. As such, valuations of these investments do not entail a significant degree of judgment.

•

Level 2 : Valuations are based on quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

•

Level 3 : Inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset.

The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of investment, whether the investment is new, whether the investment is traded on an active exchange or in the secondary market, and the current market condition. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in level 3.

Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, our own assumptions are set to reflect those that management believes market participants would use in pricing the asset or liability at the measurement date. We use prices and inputs that management believes are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be transferred from Level 1 to Level 2 or Level 2 to Level 3.

Fair value for certain of our Level 3 financial instruments is derived using internal valuation models. These internal valuation models include discounted cash flow analyses developed by management using current interest rates, estimates of the term of the particular instrument, specific issuer information and other market data for securities without an active market. In accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures”, the impact of our own credit spreads is also considered when measuring the fair value of financial assets or liabilities, including derivative contracts. Where appropriate, valuation adjustments are made to account for various factors, including bid-ask spreads, credit quality and market liquidity. These adjustments are applied on a consistent basis and are based on observable inputs where available. Management’s estimate of fair value requires significant management judgment and is subject to a high degree of variability based upon market conditions, the availability of specific issuer information and management’s assumptions.

FASB ASC Topic 825, “Financial Instruments” requires disclosure of the fair value of financial instruments for which it is practicable to estimate that value. The fair value of mortgage indebtedness is based on a discounted cash flows valuation technique, which classifies this as a level 3 liability within the fair value hierarchy. The carrying value and fair value of mortgage indebtedness as of September 30, 2014 was $248,833 and $254,503, respectively. The carrying value and fair value of mortgage indebtedness as of December 31, 2013 was $100,803 and $101,272, respectively. The fair value of secured credit facility, cash and cash equivalents and restricted cash approximates cost due to the nature of these instruments.

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

f. Recent Accounting Pronouncements

In April 2014, the FASB issued an accounting standard classified under FASB ASC Topic 205, “Presentation of Financial Statements”. This accounting standard amends existing guidance to change reporting requirements for discontinued operations by requiring the disposal of an entity to be reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. This standard is effective for interim and annual reporting periods beginning on or after December 15, 2014. Management does not anticipate that future disposals of real estate properties would qualify for discontinued operations under the new standard.

In May 2014, the FASB issued an accounting standard classified under FASB ASC Topic 606, “Revenue from Contracts with Customers”. This accounting standard generally replaces existing guidance by requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This standard is effective for annual reporting periods beginning after December 15, 2016. Management is currently evaluating the impact that this standard may have on our consolidated financial statements.

NOTE 3: Investments in Real Estate

As of September 30, 2014, our investments in real estate consisted of 22 apartment properties with 6,470 units. As of December 31, 2013, our investments in real estate consisted of 10 apartment properties with 2,790 units. The table below summarizes our investments in real estate:


	As of September 30, 2014			As of December 31, 2013			Depreciable Lives (In years)
Land	$	88,585		$	37,418		—
Building		350,585			149,657		40
Furniture, fixtures and equipment		4,880			3,021		5-10

Total investment in real estate		444,050			190,096
Accumulated depreciation		(20,848	)		(15,775	)

Investments in real estate, net	$	423,202		$	174,321

Acquisitions

On October 20, 2014, we entered into five purchase and sale agreements to acquire an apartment residential portfolio with a total of 1,549 units located in Louisville, KY. Pursuant to the terms and conditions of the purchase and sale agreements, the aggregate purchase price is $162,500. The closing is subject to customary terms and conditions and we may terminate any of the purchase agreements with or without cause prior to the expiration of the due diligence period.

On September 15, 2014, we acquired a 500-unit apartment residential community located in Shelby County, TN, known as Stonebridge Crossing. We acquired the property for an aggregate purchase price of $29,800 exclusive of closing costs.

On September 5, 2014, we acquired a 268-unit apartment residential community located in Garner, North Carolina, known as Lenoxplace at Garner Station. We acquired the property for an aggregate purchase price of $24,250 exclusive of closing costs.

On August 28, 2014, we acquired a 360-unit apartment residential community located in Cordova, Tennessee, known as Walnut Hill. We acquired the property for an aggregate purchase price of $27,900 exclusive of closing costs. In connection with the acquisition, our operating partnership issued 137,361 limited partnership units valued at $1,377.

On June 4, 2014, we acquired a 170-unit apartment residential community located in Ridgeland, Mississippi, known as Arbors at the Reservoir. We acquired the property for an aggregate purchase price of $20,250 exclusive of closing costs.

On May 7, 2014, we acquired a 202-unit apartment residential community located in Little Rock, Arkansas, known as Carrington. We acquired the property for an aggregate purchase price of $21,500 exclusive of closing costs. In connection with the acquisition our operating partnership issued 222,062 limited partnership units valued at $1,986.

On March 31, 2014, we acquired a 152-unit apartment residential community, known as King’s Landing, in Creve Coeur, Missouri. We acquired the property for an aggregate purchase price of $32,700 exclusive of closing costs. In connection with the acquisition we assumed an existing loan with an outstanding principal balance of $21,200 secured by the property, bearing interest at 4.0% per annum, and maturing on June 1, 2021.

On February 28, 2014, we acquired a portfolio of five apartment properties with 1,658 units located in Oklahoma and referred to as the Oklahoma portfolio or, the “OKC Portfolio”. We acquired the property for an aggregate purchase price of $65,000 exclusive of closing costs. In connection with the acquisition we assumed an existing loan with an outstanding principal balance of $45,763 secured by the property, bearing interest at 5.6% per annum and maturing on April 1, 2016. The fair value of the properties acquired and debt assumed was $70,431 and $48,312, respectively, generating a net gain of $2,882.

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

On January 31, 2014, we acquired a 370-unit apartment residential community located in Waukegan, Illinois, known as The Reserve at Eagle Ridge. We acquired the property for an aggregate purchase price of $29,000 exclusive of closing costs.

The following table summarizes the aggregate fair value of the assets and liabilities associated with the properties acquired during the nine-month period ended September 30, 2014, on the date of each acquisition, for the real estate accounted for under FASB ASC Topic 805.


Description	Fair Value of Assets Acquired During the Nine-Month Period Ended September 30, 2014
Assets acquired:
Investments in real estate	$	252,095
Restricted cash		320
Other assets		1,747
Deferred financing costs		548
Intangible asset		3,736

Total assets acquired	$	258,446
Liabilities assumed:
Loans payable on real estate	$	69,512
Accounts payable and accrued expenses		2,630
Other liabilities		518

Total liabilities assumed		72,660

Estimated fair value of net assets acquired	$	185,786

Our consolidated unaudited pro forma information, after including the acquisition of real estate properties, is presented below as if the acquisitions occurred on January 1, 2013. These pro forma results are not necessarily indicative of the results which actually would have occurred if the acquisition occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods:


Description	For the Three-Month Period Ended September 30, 2014			For the Three-Month Period Ended September 30, 2013
Total revenue from acquisitions, as reported	$	6,607		$	0
Pro forma revenue		15,295			13,309
Net income (loss) allocable to common shares from acquisitions, as reported		(155	)		0
Pro forma net income (loss) allocable to common shares		252			1,099
Earnings (loss) per share
Basic-as reported	$	(0.01	)	$	0.00
Diluted-as reported	$	(0.01	)	$	0.00
Basic-pro forma	$	0.01		$	0.14
Diluted-pro forma	$	0.01		$	0.14


Description	For the Nine-Month Period Ended September 30, 2014		For the Nine-Month Period Ended September 30, 2013
Total revenue from acquisitions, as reported	$	13,525	$	0
Pro forma revenue		45,189		39,258
Net income (loss) allocable to common shares from acquisitions, as reported(1)		2,457		0
Pro forma net income (loss) allocable to common shares		4,872		2,845
Earnings (loss) per share
Basic-as reported	$	0.13	$	0.00
Diluted-as reported	$	0.13	$	0.00
Basic-pro forma	$	0.26	$	0.73
Diluted-pro forma	$	0.26	$	0.73

(1)	The fair value of a property acquired exceeded the purchase price and a gain of $2,882 was recorded.

We have not yet completed the process of estimating the fair value of assets acquired and liabilities assumed. Accordingly, our preliminary estimates and the allocation of the purchase price to the assets acquired and liabilities assumed may change as we complete the process. In accordance with FASB ASC Topic 805, changes, if any, to the preliminary estimates and allocation will be reported in our financial statements retrospectively. We did not make any adjustments to the purchase price allocation during the three and nine-month periods ended September 30, 2014.

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

NOTE 4: Mortgage Indebtedness

The following table contains summary information concerning the indebtedness that encumbered our properties as of September 30, 2014:


	Outstanding Principal		Carrying Amount		Effective Interest Rate			Maturity Date
Belle Creek Apartments	$	10,575	$	10,575		2.4	%(1)	April 28, 2021
Berkshire Square Apartments		8,612		8,612		4.4	%(3)	January 1, 2021
Centrepoint Apartments		17,600		17,600		3.7	%(2)	January 1, 2019
Copper Mill Apartments		7,223		7,223		5.7	%	May 1, 2021
Crestmont Apartments		6,633		6,633		5.7	%	May 1, 2021
Cumberland Glen Apartments		6,781		6,781		5.7	%	May 1, 2021
Heritage Trace Apartments		5,405		5,405		5.7	%	May 1, 2021
Runaway Bay Apartments		10,081		10,081		3.6	%	November 1, 2022
Tresa at Arrowhead		27,500		27,500		2.4	%(1)	April 28, 2021
Reserve at Eagle Ridge		18,850		18,850		4.7	%	March 1, 2024
OKC Portfolio		45,189		47,025		2.8	%(5)	April 1, 2016
Kings’ Landing		21,200		21,200		4.0	%(6)	June 1, 2021
Crossings		15,313		15,313		3.9	%	June 1, 2024
Carrington Park		14,235		14,235		4.0	%	August 1, 2024
Arbors at the Reservoir		13,150		13,150		4.0	%	August 1, 2024
Walnut Hill		18,650		18,650		3.4	%	October 1, 2021

Total mortgage debt/Weighted-Average	$	246,997	$	248,833		3.7	%
Secured Credit Facility		5,000		5,000		2.7	%(4)	October 25, 2016

Total indebtedness /Weighted-Average	$	251,997	$	253,833		3.7	%

(1)	Floating rate at 225 basis points over 30-day LIBOR. As of September 30, 2014, 30-day LIBOR was 0.15%. Interest only payments are due monthly. These mortgages are held by RAIT.

(2)	Fixed rate. Interest only payments are due monthly. Beginning February 1, 2015, principal and interest payments are required based on a 30-year amortization schedule.

(3)	Fixed Rate. Interest only payments are due monthly. Beginning February 1, 2016, principal and interest payments are required based on a 30-year amortization schedule.

(4)	Floating rate at 250 basis points over 30-day LIBOR. As of September 30, 2014, 30-day LIBOR was 0.15%. Interest only payments are due monthly. As of September 30, 2014, we were in compliance with all financial covenants contained in the credit facility.

(5)	Contractual interest rate is 5.6%. The debt was assumed and recorded at a premium that will be amortized to interest expense over the remaining term. Principal and interest payments are required based on a 30-year amortization schedule.

(6)	Fixed Rate. Interest only payments are due monthly. Beginning June 1, 2017, principal and interest payments are required based on a 30-year amortization schedule.

As of September 30,2014 we were in compliance with all financial covenants contained in our indebtedness.

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

The following table contains summary information concerning the indebtedness that encumbered our properties as of December 31, 2013:


	Outstanding Principal		Carrying Amount		Effective Interest Rate			Maturity Date
Belle Creek Apartments	$	10,575	$	10,575		2.4	%(1)	April 28, 2021
Berkshire Square Apartments		8,612		8,612		4.4	%(3)	January 1, 2021
Centrepoint Apartments		17,600		17,600		3.7	%(2)	January 1, 2019
Copper Mill Apartments		7,293		7,293		5.7	%	May 1, 2021
Crestmont Apartments		6,698		6,698		5.7	%	May 1, 2021
Cumberland Glen Apartments		6,846		6,846		5.7	%	May 1, 2021
Heritage Trace Apartments		5,457		5,457		5.7	%	May 1, 2021
Runaway Bay Apartments		10,222		10,222		3.6	%	November 1, 2022
Tresa at Arrowhead		27,500		27,500		2.4	%(1)	April 28, 2021

Total mortgage debt/Weighted-Average	$	100,803	$	100,803		3.8	%
Secured Credit Facility		2,500		2,500		2.9	%(4)	October 25, 2016

Total indebtedness /Weighted-Average	$	103,303	$	103,303		3.8	%

(1)	Floating rate at 225 basis points over 30-day LIBOR. As of December 31, 2013, 30-day LIBOR was 0.17%. Interest only payments are due monthly. These mortgages are held by RAIT.

(2)	Fixed rate. Interest only payments are due monthly. Beginning February 1, 2015, principal and interest payments are required based on a 30-year amortization schedule.

(3)	Fixed Rate. Interest only payments are due monthly. Beginning February 1, 2016, principal and interest payments are required based on a 30-year amortization schedule.

(4)	Floating rate at 275 basis points over 30-day LIBOR. As of December 31, 2013, 30-day LIBOR was 0.17%. Interest only payments are due monthly. As of June 30, 2014, we were in compliance with all financial covenants contained in the credit facility.

The weighted average interest rate of our mortgage indebtedness was 3.7% as of September 30, 2014. As of September 30, 2014, RAIT held $38,075 of our mortgage indebtedness while $208,922 was held by third parties. As of December 31, 2013, RAIT held $38,075 of our mortgage indebtedness while $65,228 was held by third parties. For each of the three and nine-month periods ended September 30, 2014 we paid approximately $244 and $723 respectively, of interest to RAIT.

On October 24, 2014 we entered into a loan agreement for a $15,991 loan secured by a first mortgage on our Lenoxplace property. The loan bears interest at a fixed rate of 3.7% per annum, provides for monthly payments of interest only until the maturity date of November 1, 2021 when the principal balance, accrued interest and all other amounts due under the loan become due.

On September 15, 2014, we entered into a loan agreement for a $18,650 loan secured by a first mortgage on our Walnut Hill property. The loan bears interest at a fixed rate of 3.4% per annum, provides for monthly payments of interest only until the maturity date of October 1, 2021 when the principal balance, accrued interest and all other amounts due under the loan become due.

On September 9, 2014 we amended our secured revolving credit agreement with the Huntington National Bank. The amendment increased the facility from $20,000 to $30,000 and bears interest at LIBOR plus 2.50%.

On July 15, 2014, we entered into a loan agreement for a $13,150 loan secured by a first mortgage on our Arbors property. The loan bears interest at a fixed rate of 4.0% per annum, provides for monthly payments of interest only until the maturity date of August 1, 2024 when the principal balance, accrued interest and all other amounts due under the loan become due.

On July 15, 2014, we entered into a loan agreement for a $14,235 loan secured by a first mortgage on our Carrington property. The loan bears interest at a fixed rate of 4.0% per annum, provides for monthly payments of interest only until the maturity date of August 1, 2024 when the principal balance, accrued interest and all other amounts due under the loan become due.

On May 27, 2014, we entered into a loan agreement for a $15,313 loan secured by a first mortgage on our Crossings property. The loan bears interest at a fixed rate of 3.9% per annum, provides for monthly payments of interest only until the maturity date of June 1, 2024 when the principal balance, accrued interest and all other amounts due under the loan become due.

On March 31, 2014, in connection with the acquisition of King’s Landing, we assumed $21,200 of an existing loan secured by the property. The loan bears interest at a fixed rate of 4.0% per annum, provides for monthly payments of interest only until June 1, 2017 when principal and interest payments will be due monthly based on a 30-year amortization schedule, and matures on June 1, 2021.

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

On February 28, 2014, in connection with the acquisition of the OKC Portfolio we assumed $45,763 of an existing loan secured by the property. The Loan bears interest at a fixed rate of 5.6% per annum, provides for monthly payments of principal and interest based on a 30-year amortization schedule and matures on April 1, 2016. We recorded the debt assumed at its fair value of $48,312 based on a market rate of 2.8% for the remaining term. The resulting premium of $2,549 will be amortized to interest expense over the remaining term of the mortgage.

On February 7, 2014, we entered into a loan agreement for an $18,850 loan secured by a first mortgage on our Reserve at Eagle Ridge property. The loan bears interest at a fixed rate of 4.7% per annum, provides for monthly payments of interest only until the maturity date of March 1, 2024 when the principal balance, accrued interest and all other amounts due under the loan become due.

NOTE 5: Shareholder Equity and Non-Controlling Interests

Stockholder Equity

Common Shares

On July 21, 2014, we completed an underwritten public offering selling 8,050,000 shares of our common stock for $9.50 per share raising gross and net proceeds of $76,475 and $72,002, respectively.

On January 29, 2014, we completed an underwritten public offering selling 8,050,000 shares of our common stock for $8.30 per share resulting in gross and net proceeds of $66,815 and $62,718, respectively.

On January 15, 2014 our board of directors declared the following dividends:


Month	Record Date	Payment Date	Dividend Declared Per Share
January 2014	January 31, 2014	February 14, 2014	$	0.06
February 2014	February 28, 2014	March 17, 2014	$	0.06
March 2014	March 31, 2014	April 15, 2014	$	0.06

On April 17, 2014 our board of directors declared the following dividends:


Month	Record Date	Payment Date	Dividend Declared Per Share
April 2014	April 30, 2014	May 15, 2014	$	0.06
May 2014	May 30, 2014	June 16, 2014	$	0.06
June 2014	June 30, 2014	July 15, 2014	$	0.06

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

On July 10, 2014 our board of directors declared the following dividends:


Month	Record Date	Payment Date	Dividend Declared Per Share
July 2014	July 31, 2014	August 15, 2014	$	0.06
August 2014	August 29, 2014	September 15, 2014	$	0.06
September 2014	September 30, 2014	October 15, 2014	$	0.06

On October 16, 2014 our board of directors declared the following dividends:


Month	Record Date	Payment Date	Dividend Declared Per Share
October 2014	October 31, 2014	November 17, 2014	$	0.06
November 2014	November 28, 2014	December 15, 2014	$	0.06
December 2014	December 31, 2014	January 15, 2015	$	0.06

Noncontrolling Interest

On August 28, 2014, our operating partnership issued 137,361 limited partnership units valued at $1,377 in connection with the Walnut Hill acquisition.

On May 7, 2014, our operating partnership issued 222,062 limited partnership units valued at $1,986 in connection with the Carrington acquisition.

On July 10, 2014 our board of directors declared the following distributions on our operating partnership’s LP units:


Month	Record Date	Payment Date	Dividend Declared Per Share
July 2014	July 31, 2014	August 15, 2014	$	0.06
August 2014	August 29, 2014	September 15, 2014	$	0.06
September 2014	September 30, 2014	October 15, 2014	$	0.06

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

On October 16, 2014 our board of directors declared the following distributions on our operating partnership’s LP units:


Month	Record Date	Payment Date	Dividend Declared Per Share
October 2014	October 31, 2014	November 17, 2014	$	0.06
November 2014	November 28, 2014	December 15, 2014	$	0.06
December 2014	December 31, 2014	January 15, 2015	$	0.06

NOTE 6: Equity Compensation Plans

Long Term Incentive Plan

On April 5, 2011, our board of directors approved and adopted the Long Term Incentive Plan, or the incentive plan, and the Independent Directors Compensation Plan, or the director plan. Our incentive plan provides for the grants of awards to our directors, officers and full-time employees (in the event we ever have employees), full-time employees of our advisor and its affiliates, full-time employees of entities that provide services to our advisor, directors of our advisor or of entities that provide services to it, certain of our consultants and certain consultants to our advisor and its affiliates or to entities that provide services to our advisor. The incentive plan authorizes the grant of restricted or unrestricted shares of our common stock, non-qualified and incentive stock options, restricted stock units, stock appreciation rights, dividend equivalents and other stock- or cash-based awards. On July 29, 2013, our board of directors and stockholders approved the amendment and restatement of our incentive plan to reduce the number of shares of common stock issuable thereunder to 800,000 shares.

Under the director plan, which operates as a sub-plan of our incentive plan, each of our independent directors will receive 3,000 shares of common stock annually. In addition, our independent directors may elect to receive their annual cash fee in the form of our common shares or a combination of common shares and cash. On October 29, 2013, our compensation committee made the initial stock grant under the director plan so that our independent directors received 9,000 shares of our common stock, in the aggregate valued at $77 using our closing stock price of $8.60. These awards vested immediately. On May 14, 2014, our compensation committee made a stock grant under the director plan so that our independence directors received 9,000 shares of our common stock, in the aggregate valued at $81 using our closing stock price of $8.95. These awards vested immediately.

On January 31, 2014, the compensation committee awarded 40,000 shares of restricted common stock, valued at $328 using our closing stock price of $8.20, to persons affiliated with our advisor, including our executive officers. These awards generally vest over three-year periods.

On January 31, 2014, the compensation committee awarded 80,000 stock appreciation rights, or SARs, valued at $49 based on a Black-Scholes option pricing model at the date of grant, to persons affiliated with our advisor, including our executive officers. The SARs vest over a three-year period and may be exercised between the date of vesting and January 31, 2019, the expiration date of the SARs.

Distribution Reinvestment Program

We had adopted a distribution reinvestment program, or the DRP, through which our stockholders could elect to reinvest an amount equal to the distributions declared on their shares of common stock in additional shares in lieu of receiving cash distributions. The common stock available under the DRP was reallocated to the August 2013 underwritten offering when the amended registration statement was filed and the DRP was subsequently terminated. No selling commissions or dealer manager fees were paid on shares sold under the DRP.

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

NOTE 7: Related Party Transactions and Arrangements

Fees and Expenses Paid to Our Advisor

Effective as of May 7, 2013, we entered into the Second Amended and Restated Advisory Agreement, or the amended and restated advisory agreement. The amended and restated advisory agreement was adopted primarily to adjust the advisor’s compensation and modify its duties to us.

Pursuant to the terms of the amended advisory agreement, our advisor will be compensated as follows:

•

Quarterly base management fee of 0.1875% of average gross real estate assets as of the last day of such quarter. Average gross real estate assets means the average of the aggregate book value of our real estate assets before reserves for depreciation or other similar noncash reserves and excluding the book values attributable to the eight properties that were acquired prior to August 16, 2013. We compute average gross real estate assets by taking the average of these book values at the end of each month during the quarter for which we are calculating the fee. The fee is payable quarterly in an amount equal to 0.1875% of average gross real estate assets as of the last day of such quarter. For the three and nine-month periods ended September 30, 2014, our advisor earned $445 and $938 of asset management fees, respectively. For the three and nine-month periods ended September 30, 2013, our advisor earned $0 and $82 of asset management fees, respectively.

•

We pay our advisor an incentive fee based on our pre-incentive fee core funds from operations, or Core FFO, a non-GAAP measure, as defined in the advisory agreement. The incentive fee is computed at the end of each fiscal quarter as follows:

•

no incentive fee in any fiscal quarter in which our pre-incentive fee Core FFO does not exceed the hurdle rate of 1.75% (7% annualized) of the cumulative gross amount of equity capital we have obtained; and

•

20% of the amount of our pre-incentive fee Core FFO that exceeds 1.75% (7% annualized) of the cumulative gross proceeds from the issuance of equity securities we have obtained.

•

For the three and nine-month periods ended September 30, 2014 our advisor earned $0 and $154 of incentive fees, respectively. For the three and nine-month periods ended September 30, 2013 our advisor earned $0 and $79 of incentive fees. These fees are included within asset management fees in our consolidated statements of operations.

As of September 30, 2014 and December 31, 2013 we had liabilities payable to our advisor for asset management fees of $445 and $107, respectively.

Property Management Fees Paid to Our Property Manager

We have entered into property management agreements with RAIT Residential, or our property manager, which is majority owned by RAIT, with respect to each of our properties. Pursuant to the property management agreements, we pay our property manager property management and leasing fees on a monthly basis of an amount up to 4.0% of the gross revenues from the property for each month. Additionally, we may pay our property manager a separate fee for the one-time initial rent-up or leasing-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area. Each management agreement has an initial one year term, subject to automatic one-year renewals unless either party gives prior notice of its desire to terminate the management agreement. For the three and nine-month periods ended September 30, 2014 our property manager earned $471 and $1,203, respectively, of property management and leasing fees. For the three and nine-month periods ended September 30, 2013 our property manager earned $190 and $563, respectively, of property management and leasing fees. As of September 30, 2014 and December 31, 2013, we had liabilities payable to our property manager for property management and leasing fees of $175 and $83, respectively.

Independence Realty Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2014

(Unaudited and dollars in thousands, except share and per share data)

NOTE 8: Earnings (Loss) Per Share

The following table presents a reconciliation of basic and diluted earnings (loss) per share for the three and nine-month periods ended September 30, 2014 and 2013:


	For the Three-Month Periods Ended September 30						For the Nine-Month Periods Ended September 30
	2014			2013			2014		2013
Net Income (loss)	$	(58	)	$	302		$	2,749	$	966
(Income) loss allocated to preferred shares		—			(2	)		—		(10	)
(Income) loss allocated to non-controlling interests		2			(45	)		2		(649	)

Net Income (loss) allocable to common shares		(56	)		255			2,751		307

Weighted-average shares outstanding—Basic		24,011,540			7,643,540			19,004,591		3,875,331
Dilutive securities under the treasury stock method		—			—			35,604		—
Weighted-average shares outstanding—Diluted		24,011,540			7,643,540			19,040,301		3,875,331

Earnings (loss) per share—Basic	$	(0.00	)	$	0.03		$	0.14	$	0.08

Earnings (loss) per share—Diluted	$	(0.00	)	$	0.03		$	0.14	$	0.08

For the three-month period ended September 30, 2014, SARS and unvested shares of 54,268, were excluded from the earnings (loss) per share computation because their effect would have been anti-dilutive.

Earnings per share is computed in accordance with FASB ASC Topic 260, “Earnings per Share”, by dividing the Net Income (loss) allocable to common shares by the weighted average number of common shares outstanding during the respective periods.

NOTE 9: Commitments and Contingencies

Litigation

From time to time, we are party to various lawsuits, claims for negligence and other legal proceedings that arise in the ordinary course of our business. We are not currently a party, as plaintiff or defendant, to any legal proceedings which, individually or in the aggregate, would be expected to have a material effect on our business, financial condition, results of operations, or financial statements, taken as a whole, if determined adversely to us.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The Securities and Exchange Commission, or SEC, encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This report contains or incorporates by reference such “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act.

Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements. As used herein, the terms “we,” “our” and “us” refer to Independence Realty Trust, Inc. and, as required by context, Independence Realty Operating Partnership, LP, which we refer to as our operating partnership, and their subsidiaries.

We claim the protection of the safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995. These statements may be made directly in this report and they may also be incorporated by reference in this report to other documents filed with the SEC, and include, but are not limited to, statements about future financial and operating results and performance, statements about our plans, objectives, expectations and intentions with respect to future operations, products and services, and other statements that are not historical facts. These forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements.

The risk factors discussed and identified in Item 1A of our Annual Report on Form 10-K filed with the SEC on March 11, 2014, and in other of our public filings with the SEC, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this filing or to reflect the occurrence of unanticipated events.

Overview

We are a Maryland corporation that owns apartment properties in geographic submarkets that we believe support strong occupancy and have the potential for growth in rental rates. We seek to provide stockholders with attractive risk-adjusted returns, with an emphasis on distributions and capital appreciation. We are externally advised by a wholly-owned subsidiary of RAIT Financial Trust, or RAIT (NYSE: RAS), a multi-strategy commercial real estate company organized as an internally managed REIT with approximately $5.4 billion of assets under management as of September 30, 2014. RAIT invests primarily in commercial mortgages and, to a lesser extent, apartment properties. RAIT owned 28.2% of our outstanding common shares as of September 30, 2014. We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the Code, commencing with our taxable year ended December 31, 2011.

We seek to acquire and operate apartment properties that:

•

have stable occupancy;

•

are located in submarkets that we do not expect will experience substantial new apartment construction in the foreseeable future;

•

in appropriate circumstances, present opportunities for repositioning or updating through capital expenditures; and

•

present opportunities to apply tailored marketing and management strategies to attract and retain residents and enable rent increases.

On July 21, 2014, we completed an underwritten public offering of our common stock raising gross proceeds of $76.5 million. We deployed or reserved the majority of the proceeds during the quarter ending September 30, 2014. After giving effect to this offering, the percent of our outstanding common stock held by RAIT was reduced from 39.4% to 28.2%. During the nine month period ending September 30, 2014, we acquired 12 properties totaling 3,680 units for $168.5 million. These acquisitions contributed to our substantial growth in a number of key financial measures this quarter when compared to the corresponding period in 2013 as follows: core funds from operations increased 202% to $4.0 million from $1.3 million, operating income increased 83% to $2.2 million from $1.2 million and total revenues grew 173% to $13.1 million from $4.8 million.

Key Statistics

(Unaudited and dollars in thousands, except per share and per unit information)


	As of or For the Three-Month Periods Ended
	September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013			September 30, 2013
Financial Statistics:
Total revenue	$	13,057		$	11,649		$	8,135		$	5,768		$	4,787
Earnings (loss) per share-diluted	$	(0.00	)	$	(0.01	)	$	0.19		$	0.03		$	0.03
Funds from Operations (“FFO”) per share	$	0.14		$	0.18		$	0.33		$	0.17		$	0.17
Core funds from operations (“CFFO”) per share	$	0.17		$	0.19		$	0.17		$	0.20		$	0.17
Dividends declared per common share	$	0.18		$	0.18		$	0.18		$	0.16		$	0.16
Total Shares Outstanding		25,801,540			17,751,540			17,742,540			9,652,540			9,643,540
Apartment Property Portfolio:
Reported investments in real estate at cost	$	444,050		$	362,323		$	320,437		$	190,096		$	166,665
Net operating income	$	6,905		$	6,064		$	4,147		$	3,159		$	2,373
Number of properties owned		22			19			17			10			9
Multifamily units owned		6,470			5,342			4,970			2,790			2,358
Portfolio weighted average occupancy		92.6	%		93.1	%		93.9	%		94.6	%		94.4	%
Weighted average monthly effective rent per unit ⁽¹⁾	$	791		$	764		$	730		$	765		$	784

(1)

Weighted average monthly effective rent per occupied unit represents the average monthly rent collected for all occupied units after giving effect to tenant concessions. We do not report average effective rent per unit in the month of acquisition as it is not representative of a full month of operations. Same Store weighted average effective rent per unit was $814, $798, $795, $792, and $784 for the periods presented above, respectively. Same Store is defined as properties in the portfolio as of June 30, 2013 through September 30, 2014.

As of September 30, 2014, we own 22 apartment properties containing an aggregate of 6,470 apartment units. We refer to these apartment properties as our “existing portfolio.” As of September 30, 2014, our existing portfolio had an average occupancy of 92.6% and an average monthly effective rent per occupied apartment unit of $791.

Our Properties

The following table presents an overview of our portfolio as of September 30, 2014.


Property Name	Location	Acquisition Date		Year Built or Renovated ⁽¹⁾		Units ⁽²⁾			Physical Occupancy ⁽³⁾			Average Monthly Effective Rent per Occupied Unit ⁽⁴⁾
Belle Creek	Henderson, Colorado		4/29/2011		2011		162	⁽⁵⁾		96.3	%	$	1,024
Copper Mill	Austin, Texas		4/29/2011		2010		320			94.7	%		812
Crestmont	Marietta, Georgia		4/29/2011		2010		228			96.5	%		937
Cumberland Glen	Smyrna, Georgia		4/29/2011		2010		222			95.5	%		711
Heritage Trace	Newport News, Virginia		4/29/2011		2010		200			87.5	%		695
Tresa at Arrowhead	Phoenix, Arizona		4/29/2011		2006		360			96.1	%		828
Centrepoint	Tucson, Arizona		12/16/2011		2006		320			91.6	%		833
Runaway Bay	Indianapolis, Indiana		10/11/2012		2002		192			95.8	%		916
Berkshire Square	Indianapolis, Indiana		9/19/2013		2012		354			91.2	%		572
The Crossings	Jackson, Mississippi		11/22/2013		2006		432			83.8	%		778
Reserve at Eagle Ridge	Waukegan, Illinois		1/31/2014		2008		370			91.6	%		942
Windrush	Edmond, Oklahoma		2/28/2014		2011		160			95.0	%		783
Heritage Park	Oklahoma City, Oklahoma		2/28/2014		2011		453			92.5	%		636
Raindance	Oklahoma City, Oklahoma		2/28/2014		2011		504			92.1	%		527
Augusta	Oklahoma City, Oklahoma		2/28/2014		2011		197			90.9	%		683
Invitational	Oklahoma City, Oklahoma		2/28/2014		2011		344			89.5	%		686
King’s Landing	Creve Coeur, Missouri		3/31/2014		2005		152			87.9	%		1,493
Carrington Park	Little Rock, Arkansas		5/07/2014		1999		202			90.1	%		1,000
Arbors at the Reservoir	Ridgeland, Mississippi		6/04/2014		2000		170			95.3	%		1,062
Walnut Hill	Cordova, Tennessee		8/28/2014		2001		360			95.8	%		919
Lenoxplace	Raleigh, North Carolina		9/05/2014		2012		268			95.9	%		—	⁽⁶⁾
Stonebridge	Cordova, Tennessee		9/15/2014		1994		500			94.8	%		—	⁽⁶⁾

Total/Weighted Average							6,470			92.6	%	$	791

(1)	All dates are for the year in which a significant renovation program was completed, except for Runaway Bay, Arbors at the Reservoir, King’s Landing, Walnut Hill and Stonebridge which is the year construction was completed.

(2)	Units represents the total number of apartment units available for rent at September 30, 2014.

(3)	Physical occupancy for each of our properties is calculated as (i) total units rented as of September 30, 2014 divided by (ii) total units available as of September 30, 2014, expressed as a percentage.

(4)	Average monthly effective rent per occupied unit represents the average monthly rent for all occupied units for the three-month period ended September 30, 2014.

(5)

Includes 6,256 square feet of retail space in six units, of which 1,010 square feet of space is occupied by RAIT Residential for use as the leasing office. The remaining 5,246 square feet of space is 86% occupied by four tenants with an average monthly base rent of $1,623, or $16 per square foot per year. These four tenants are principally engaged in the following businesses: grocery, retail and various retail services.

(6)	We do not report average effective rent per unit in the month of acquisition as it is not representative of a full month of operations.

On October 20, 2014, we entered into five purchase and sale agreements to acquire an apartment residential portfolio with a total of 1,549 units located in Louisville, Kentucky. Pursuant to the terms and conditions of the purchase and sale agreements, the aggregate purchase price is $162,500. The closing is subject to customary terms and conditions and we may terminate any of the purchase agreements with or without cause prior to the expiration of the due diligence period.

Non-GAAP Financial Measures

Funds from Operations and Core Funds from Operations

We believe that FFO and Core FFO, each of which is a non-GAAP financial measure, are additional appropriate measures of the operating performance of a REIT and us in particular. We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net income or loss allocated to common shares (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, gains or losses on sales of real estate and the cumulative effect of changes in accounting principles.

Core FFO is a computation made by analysts and investors to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations, including acquisition expenses, expensed costs related to the issuance of shares of our common stock, gains or losses on real estate transactions and equity-based compensation expenses, from the determination of FFO. We incur acquisition expenses in connection with acquisitions of real estate properties and expense those costs when incurred in accordance with U.S. GAAP. As these expenses are one-time and reflective of investing activities rather than operating performance, we add back these costs to FFO in determining Core FFO.

Our calculation of Core FFO differs from the methodology used for calculating Core FFO by some other REITs and, accordingly, our Core FFO may not be comparable to Core FFO reported by other REITs. Our management utilizes FFO and Core FFO as measures of our operating performance, and believes they are also useful to investors, because they facilitate an understanding of our operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and with respect to Core FFO, acquisition expenses and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO, Core FFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO and Core FFO may provide us and our investors with an additional useful measure to compare our financial performance to certain other REITs. We also use Core FFO for purposes of determining the quarterly incentive fee, if any, payable to our advisor.

Neither FFO nor Core FFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and Core FFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor Core FFO should be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity.

Set forth below is a reconciliation of net income (loss) to FFO and Core FFO for the three and nine-months ended September 30, 2014 and 2013 (in thousands, except share and per share information):


	For the Three-Month Period Ended September 30, 2014						For the Three-Month Period Ended September 30, 2013
	Amount			Per Share			Amount			Per Share
Funds From Operations:
Net income (loss)	$	(58	)	$	(0.00	)	$	302		$	0.04
Adjustments:
Income allocated to preferred shares		—			—			(2	)		(0.00	)
Income allocated to preferred units		2			—			(45	)		(0.01	)
Real estate depreciation and amortization		3,309			0.14			1,008			0.13

Funds From Operations	$	3,253		$	0.14		$	1,263		$	0.17

Weighted-average shares—diluted		24,011,540			24,011,540			7,643,540			7,643,540

Core Funds From Operations:
Funds From Operations	$	3,253		$	0.14		$	1,263		$	0.17
Adjustments:
Equity based compensation		31			0.00			—			—
Acquisition fees and expenses		687			0.03			50			0.00

Core Funds From Operations	$	3,971		$	0.17		$	1,313		$	0.17

Weighted-average shares—diluted		24,011,540			24,011,540			7,643,540			7,643,540


	For the Nine-Month Period Ended September 30, 2014						For the Nine-Month Period Ended September 30, 2013
	Amount			Per Share			Amount			Per Share
Funds From Operations:
Net income (loss)	$	2,749		$	0.14		$	966		$	0.15
Adjustments:
Income allocated to preferred shares		—			—			(10	)		(0.00	)
Income allocated to preferred units		2			0.00			(220	)		(0.03	)
Real estate depreciation and amortization		8,664			0.46			3,107			0.49

Funds From Operations	$	11,415		$	0.60		$	3,843		$	0.61

Weighted-average shares—diluted		19,040,301			19,040,301			6,309,900			6,309,900

Core Funds From Operations:
Funds From Operations	$	11,415		$	0.60		$	3,843		$	0.61
Adjustments:
Acquisition fees and expenses		1,201			0.07			50			0.01
Equity based compensation		174			0.02			—			—
(Gains) losses on assets		(2,882	)		(0.17	)		—			—

Core Funds From Operations	$	9,908		$	0.52		$	3,893		$	0.62

Weighted-average shares—diluted		19,040,301			19,040,301			6,309,900			6,309,900

Results of Operations

Three-Month Period Ended September 30, 2014 Compared to the Three-Month Period Ended September 30, 2013

Revenue

Rental income . Rental revenue increased $7.6 million to $11.9 million for the three-month period ended September 30, 2014 from $4.3 million for the three-month period ended September 30, 2013. The increase is substantially due to the $7.4 million of rental income from the acquisition of 12 properties during the nine-month period ended September 30, 2014 and to two properties acquired in September 2013 and November 2013. The remaining increase is due to improved occupancy and rental rates at the historical properties.

Tenant reimbursement income. Tenant reimbursement income increased $0.3 million to $0.5 million for the three-month period ended September 30, 2014 from $0.2 million for the three-month period ended September 30, 2013. The increase is due to the acquisition of 12 properties during the nine-month period ended September 30, 2014 and to two properties acquired in September 2013 and November 2013.

Other income. Other income increased $0.4 million to $0.7 million for the three-month period ended September 30, 2014 from $0.3 million for the three-month period ended September 30, 2013. The increase is due to the acquisition of 12 properties during the nine-month period ended September 30, 2014 and to two properties acquired in September 2013 and November 2013.

Expenses

Property operating expenses. Property operating expenses increased $3.8 million to $6.2 million for the three-month period ended September 30, 2014 from $2.4 million for the three-month period ended September 30, 2013. The increase is due to the acquisition of 12 properties during the nine-month period ended September 30, 2014 and from two properties acquired in September 2013 and November 2013.

General and administrative expense . General and administrative expense increased $0.1 million to $0.2 million for the three-month period ended September, 30 2014 from $0.1 million for the three-month period ended September 30, 2013. The increase is due to costs associated with being a public company and stock based compensation for the three-month period ended September 30, 2014.

Asset management fees. Asset management fee increased $0.4 million to $0.4 million for the three-month period ended September 30, 2014 from $4,000 for the three-month period ended September 30, 2013. The increase is due to the acquisition of 12 properties during the nine-month period ended September 30, 2014 and to two properties acquired in September 2013 and November 2013.

Acquisition expenses. Acquisition expenses increased $0.6 million to $0.7 million for the three-month period ended September 30, 2014 from $0.1 million for the three month period ended September 30, 2013. These expenses were incurred in connection with the acquisition of three properties during the three-month period ended September 30, 2014 as compared to one property during the three month period ended September 30, 2013.

Depreciation and amortization expense. Depreciation and amortization expense increased $2.3 million to $3.3 million for the three-month period ended September 30, 2014 from $1.0 million for the three-month period ended September 30, 2013. The increase is due to the acquisition of 12 properties during the nine-month period ended September 30, 2014 and to two properties acquired in September 2013 and November 2013.

Interest expense. Interest expense increased $1.4 million to $2.3 million for the three-month period ended September 30, 2014 from $0.9 million for the three-month period ended September 30, 2013. The increase is due to the $80.2 million of first mortgages obtained and the $67.8 million of debt assumed during the nine-month period ended September 30 2014.

Nine-Month Period Ended September 30, 2014 Compared to the Nine-Month Period Ended September 30, 2013

Revenue

Rental income . Rental revenue increased $17.2 million to $29.8 million for the nine-month period ended September 30, 2014 from $12.7 million for the nine-month period ended September 30, 2013. The increase is substantially due to the $16.7 million of revenue from the acquisition of 12 properties during the nine-month period ended September 30, 2014 and to two properties acquired in September 2013 and November 2013. The remaining increase is due to improved occupancy and rental rates at the historical properties.

Tenant reimbursement income. Reimbursement income increased $0.6 million to $1.3 million for the nine-month period ended September 30, 2014 from $0.7 million for the nine-month period ended September 30, 2013. The increase is due to the acquisition of 12 properties during the nine-months ended September 30, 2014 and to two properties acquired in September 2013 and November 2013.

Other income. Other income increased $0.8 million to $1.7 million for the nine-month period ended September 30, 2014 from $0.9 million for the nine-month period ended September 30, 2013. The increase is due to the acquisition of 12 properties during the nine-months ended September 30, 2014 and to two properties acquired in September 2013 and November 2013.

Expenses

Property operating expenses. Property operating expenses increased $8.9 million to $15.7 million for the nine-month period ended September 30, 2014 from $6.8 million for the nine-month period ended September 30, 2013. The increase is substantially due to the $8.4 million of revenue from the acquisition of 12 properties during the nine-month period ended September 30, 2014 and to two properties acquired in September 2013 and November 2013. The remaining increase is due to an increase in real estate tax expense and repairs and maintenance expense at the historical properties.

General and administrative expense . General and administrative expense increased $0.4 million to $0.8 million for the nine-month period ended September 30, 2014 from $0.4 million for the nine-month period ended September 30, 2013. The increase is due to costs associated with being a public company and stock based compensation for the nine-month period ended September 30, 2014.

Asset management fees. Asset management fees increased $0.9 million to $1.1 million for the nine-month period ended September 30, 2014 from $0.2 million for the nine-month period ended September 30, 2013. The increase is due to the acquisition of 12 properties during the nine-month period ended September 30, 2014, to two properties acquired in September 2013 and November 2013, and to the incentive fee payable under our amended advisory agreement.

Acquisition expenses. Acquisition expenses increased $1.1 million to $1.2 million for the nine-month period ended September 30, 2014 from $0.1 million for the nine-month period ended September. These expenses were incurred in connection with the acquisition of 12 properties during the nine-month period ended September 30, 2014 as compared to one property acquired during the nine-month period ended September 30, 2013.

Depreciation and amortization expense. Depreciation and amortization expense increased $5.6 million to $8.7 million for the nine-month period ended September 30, 2014 from $3.1 million for the nine-month period ended September 30, 2013. The increase is due to the acquisition of 12 properties during the nine-month period ended September 30, 2014 and to two properties acquired in September 2013 and November 2013.

Interest expense. Interest expense increased $2.8 million to $5.5 million for the nine-month period ended September 30, 2014 from $2.7 million for the nine-month period ended September 30, 2013. The increase is due to the $80.2 million of first mortgages obtained and the $67.8 million of debt assumed in connection with our property acquisitions during the nine-month period ended September 30 2014.

Liquidity and Capital Resources

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain investments, pay distributions and other general business needs.

We believe our available cash balances, and other financing arrangements and cash flows from operations will be sufficient to fund our liquidity requirements with respect to our existing portfolio for the next 12 months. We expect that our existing cash, which was obtained principally in our most recent underwritten offering, together with borrowings we may obtain and the future acquisitions we expect to make as a result of the completion of our most recent underwritten offering will have a significant impact on our future results of operations. In general, we expect that our income and expenses related to our portfolio will increase in future periods as a result of anticipated future acquisitions of real estate. Should our liquidity needs exceed our available sources of liquidity, we believe that we could engage in offerings of our securities or sell assets to raise additional cash. We may not be able to obtain additional financing when we desire to do so or on terms and conditions acceptable to us. If we fail to obtain additional financing, our ability to maintain or grow our business will be constrained.

Our primary cash requirements are to:

•

make investments and fund the associated costs;

•

repay our indebtedness;

•

pay our operating expenses, including fees paid to our advisor and our property manager; and

•

distribute a minimum of 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gain) and to make investments in a manner that enables us to maintain our qualification as a REIT.

We intend to meet these liquidity requirements primarily through:

•

the use of our cash and cash equivalent balance of $34.8 million as of September 30, 2014;

•

cash generated from operating activities;

•

if required, proceeds from future borrowings and offerings.

We will seek to enhance our growth through the use of prudent amounts of leverage. In general, we intend to limit our aggregate leverage to 65% of the combined initial purchase price of all of our real estate properties. However, we are not subject to any limitations on the amount of leverage we may use, and, accordingly, the amount of leverage we use may be significantly less or greater than we currently anticipate. By operating on a leveraged basis, we expect to have more funds available for property acquisitions and other purposes, which we believe will allow us to acquire more properties than would otherwise be possible, resulting in a larger and more diversified portfolio. We may employ greater leverage in order to more quickly build a diversified portfolio of assets.

On July 21, 2014, we completed an underwritten public offering selling 8,050,000 shares of our common stock for $9.50 per share raising gross and net proceeds of $76.5 million and $72.0 million, respectively.

On January 29, 2014, we completed an underwritten public offering selling 8,050,000 shares of our common stock for $8.30 per share raising gross and net proceeds of $66.8 million and $62.7 million, respectively.

On October 25, 2013, we entered into a $20 million secured revolving credit agreement with The Huntington National Bank to be used to acquire properties, for capital expenditures and for general corporate purposes. On September 9, 2014 we amended this agreement increasing the facility to $30 million. The facility has a 3-year term, bears interest at LIBOR plus 2.50% and contains customary financial covenants for this type of revolving credit agreement. As of September 30, 2014, there was $25 million of availability under this facility.

Cash Flows

As of September 30, 2014 and 2013, we maintained cash and cash equivalents of approximately $34.8 million and $16.5 million, respectively. Our cash and cash equivalents were generated from the following activities (dollars in thousands):


	For the Nine-Month Periods Ended September 30
	2014			2013
Cash flow from operating activities	$	10,497		$	3,726
Cash flow from investing activities		(184,107	)		(14,076	)
Cash flow from financing activities		205,062			24,343

Net change in cash and cash equivalents		31,452			13,993
Cash and cash equivalents at beginning of period		3,334			2,533

Cash and cash equivalents at end of period	$	34,786		$	16,526

Our cash inflow from operating activities during the nine-month period ended September 30, 2014 is primarily due to the operations of the 12 additional properties acquired during the nine-month period ended September 30, 2014 and two properties acquired in September 2013 and November 2013.

Our cash outflow from investing activities during the nine-month period ended September 30, 2014 is primarily due to the acquisition of 12 properties during the nine-month period ended September 30, 2014.

The cash flow from our financing activities during the nine-month period ended September 30, 2014 is primarily due to the completion of our January and August underwritten public offerings and financing secured by our Reserve at Eagle Ridge, The Crossings, Carrington, Arbors and Walnut Hill properties.

Off-Balance Sheet Arrangements

None.

Critical Accounting Estimates and Policies

Our Annual Report on Form 10-K for the year ended December 31, 2013 contains a discussion of our critical accounting policies. Management discusses our critical accounting policies and management’s judgments and estimates with our Audit Committee.

Recent Accounting Pronouncements

In April 2014, the FASB issued an accounting standard classified under FASB ASC Topic 205, “Presentation of Financial Statements”. This accounting standard amends existing guidance to change reporting requirements for discontinued operations by requiring the disposal of an entity to be reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. This standard is effective for interim and annual reporting periods beginning on or after December 15, 2014. Management is currently evaluating the impact that this standard may have on our consolidated financial statements.

Item 3.

Qualitative and Quantitative Disclosure About Market Risk.

Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. We may be exposed to interest rate changes primarily as a result of long-term debt used to maintain liquidity, fund capital expenditures and expand our real estate investment portfolio and operations. Market fluctuations in real estate financing may affect the availability and cost of funds needed to expand our investment portfolio. In addition, restrictions upon the availability of real estate financing or high interest rates for real estate loans could adversely affect our ability to dispose of real estate in the future. We seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. We may use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. With regard to variable rate financing, our advisor assesses our interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. Our advisor maintains risk management control systems to monitor interest rate cash flow risk attributable to both our outstanding and forecasted debt obligations as well as our potential offsetting hedge positions. While this hedging strategy is designed to minimize the impact on our net income and funds from operations of changes in interest rates, the overall returns on any investment in our securities may be reduced. We currently have limited exposure to financial market risks.

We may also be exposed to credit risk in derivative contracts we may use. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty will owe us, which creates credit risk for us. If the fair value of a derivative contract is negative, we will owe the counterparty and, therefore, do not have credit risk. We seek to minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties.

Interest Rate Risk and Sensitivity

Interest rates may be affected by economic, geo-political, monetary and fiscal policy, market supply and demand and other factors generally outside our control, and such factors may be highly volatile. A change in market interest rates applicable to the fixed-rate portion of our indebtedness affects the fair value, but it has no effect on interest incurred or cash flows. A change in market interest rates applicable to the variable portion of our indebtedness affects the interest incurred and cash flows, but does not affect the fair value.

As of September 30, 2014, our only interest rate sensitive assets or liabilities related to our $252.0 million of outstanding indebtedness, of which $43.1 million is floating-rate and $208.9 million is fixed-rate indebtedness. We monitor interest rate risk routinely and seek to minimize the possibility that a change in interest rates would impact the interest incurred and our cash flows. To mitigate such risk, we may use interest rate derivative contracts. As of September 30, 2014 and December 31, 2013, we did not have any interest rate derivatives in effect.

As of September 30, 2014, the fair value of our $208.9 million of fixed-rate indebtedness was $216.9 million. The fair value estimate of our fixed rate debt was estimated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loans were originated at September 30, 2014. As we expect to hold our fixed rate instruments to maturity and the amounts due under such instruments would be limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that fluctuations in interest rates, and the resulting change in fair value of our fixed rate instruments, would have a significant impact on our operations.

The following table summarizes the interest income and interest expense for a 12-month period, and the change in the net fair value of our investments and indebtedness assuming an instantaneous increase or decrease of 100 basis points in the LIBOR interest rate curve, both adjusted for the effects of our interest rate hedging activities (dollars in thousands):


	Liabilities Subject to Interest Rate Sensitivity (Par Amount)			100 Basis Point Increase			100 Basis Point Decrease(1)
Interest expense from variable-rate indebtedness		(43,075	)		(431	)		69
Fair value of fixed-rate indebtedness		(208,922	)		(11,403	)		12,270

(1)	Assumes the LIBOR interest rate will not decrease below 0%. The quoted 30-day LIBOR rate was 0.15% at September 30, 2014.

Item 4.

Controls and Procedures.

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act). Based upon, and as of the date of, the evaluation, our principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective at the reasonable assurance level in recording, processing, summarizing and reporting on a timely basis, information required to be disclosed by us in our reports that we file or submit under the Exchange Act.

Changes in Internal Control Over Financial Reporting

There have been no significant changes in our internal control over financial reporting that occurred during the three-month period ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1.

Legal Proceedings.

Item 1A.

Risk Factors.

There have not been any material changes from the risk factors previously disclosed in Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

Item 2.

Unregistered Sales of Equity Securities and use of proceeds.

On July 28, 2014, Independence Realty Operating Partnership, LP, or IROP, our operating partnership, entered into a contribution agreement with contributors named in the contribution agreement. The contribution agreement set forth the terms and conditions pursuant to which IROP could acquire from the contributors, as tenants in common, the property known as Walnut Hill Apartments located in Cordova, Tennessee, or the property. On August 28, 2014, the closing contemplated by the contribution agreement was completed and a subsidiary of IROP acquired the property. The purchase price paid by IROP to the contributors for the contribution of the property at the closing was $27.9 million, in the aggregate, which purchase price was allocated pro rata among the contributors in relation to their respective interest in the property and was payable as described below. The contribution agreement provided that each contributor that was an accredited investor (as defined in Rule 501 of Regulation D, or Regulation D, promulgated under the Securities Act of 1933, as amended, or the Securities Act) had to elect to receive, as consideration for the transfer of the property, either cash consideration or IROP common units, or units, having an aggregate dollar value equal to the cash consideration otherwise payable to such contributor, or some combination of cash consideration and units, at each such contributor’s discretion. The contribution agreement provided that each contributor that was not an accredited investor would receive cash consideration for the transfer of the property. At the closing, five of the qualifying contributors, or the electing contributors, elected to receive 137,360.78 units valued at $1,377,110, in the aggregate.

In connection with the issuance of the units at the closing, we and IROP and the electing contributors entered into an admission agreement and amendment, or the admission agreement, dated as of August 28, 2014 to the IROP limited partnership agreement to admit the electing contributors as limited partners of IROP and an exchange rights agreement, or the exchange agreement, dated as of August 28, 2014 providing for the terms and conditions under which the units could be exchanged for cash in an amount equal to the value of an equivalent number of shares of our common stock as of the date the IROP receives contributor’s notice of its desire to exchange or, at IROP’s option, for the equivalent number of shares of our common stock. The value and number of shares exchanged by IROP is subject to adjustment under defined circumstances. The exchange agreement provides that the exchange right is exercisable one year after the issuance of the units or upon the liquidation or the sale of substantially all of IROP’s assets, subject to the terms of the IROP limited partnership agreement. The issuance of the units to the electing contributors was exempt from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D and all of the electing contributors were accredited investors. The summaries in this report of the admission agreement and the exchange agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such documents which are filed as exhibits to this quarterly report.

The Company previously reported information called for by this item with respect to another unregistered sale of equity securities in our current report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2014.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures.

None.

Item 5.

Other Information.

None.

Item 6.

Exhibits.

The exhibits listed on the Exhibit Index (following the signatures section of this Quarterly Report on Form 10-Q) are included herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Independence Realty Trust, Inc.

Date: November 7, 2014	By:	/ S / S COTT F. S CHAEFFER
		Scott F. Schaeffer
		Chairman of the Board and Chief Executive Officer
		(Principal Executive Officer)

Date: November 7, 2014	By:	/ S / J AMES J. S EBRA
		James J. Sebra
		Chief Financial Officer and Treasurer
		(Principal Financial Officer and Principal Accounting Officer)

EXHIBIT INDEX


Exhibit		Description

3.1		Articles of Restatement of Independence Realty Trust, Inc. (the “Company”), dated as of August 20, 2013, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 20, 2013.

3.2		Second Amended and Restated Bylaws of the Company, incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 (the “2013 Q1 10-Q”).

4.1		Fourth Amended and Restated Agreement of Limited Partnership of Independence Realty Operating Partnership, LP, dated as of May 7, 2013, incorporated by reference to Exhibit 4.1 to the 2013 Q1 10-Q.

4.2		First Amendment, dated as of August 20, 2013, to Fourth Amended and Restated Agreement of Limited Partnership of Independence Realty Operating Partnership, LP, dated as of May 7, 2013, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 20, 2013.

4.3		Admission Agreement and Amendment dated as of May 7, 2014 to Fourth Amendment and Restated Agreement of Limited Partnership of Independence Realty Operating Partnership, LP dated as of May 7, 2013, a corrected copy was incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (the “2014 Q1 10-Q”), replacing the copy filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on May 7, 2014 (the “5/7/14 Form 8-K”).

4.4		Registration Rights Agreement by and among the Company, Independence Realty Operating Partnership, LP, RAIT Financial Trust and the RAIT Parties (as defined therein), dated as of July 26, 2013, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 1, 2013.

4.5		Admission Agreement and Amendment dated as of August 28, 2014 to Fourth Amendment and Restated Agreement of Limited Partnership of Independence Realty Operating Partnership, LP dated as of May 7, 2013, filed herewith.

4.6		Exchange Rights Agreement dated as of August 28, 2014 among the Company, Independence Realty Operating Partnership, LP and the limited partners named therein, filed herewith.

10.1		Independence Realty Trust, Inc. Long Term Incentive Plan Form of Stock Appreciation Rights Award Certificate adopted January 31, 2014, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 6, 2014 (the “2/6/14 Form 8-K”).

10.2		Independence Realty Trust, Inc. Long Term Incentive Plan a Form of Restricted Stock Award Certificate adopted January 31, 2014, incorporated by reference to Exhibit 10.2 to the 2/6/14 Form 8-K.

10.3		Loan Agreement dated as of February 7, 2014 between Bank of America, N.A., as lender, and IRT Eagle Ridge Apartments Owner, LLC, as borrower, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 12, 2014 (the “2/12/14 Form 8-K”).

10.4		Promissory Note dated February 7, 2014 made by IRT Eagle Ridge Apartments Owner, LLC, as borrower, payable to Bank of America, N.A., as lender, incorporated by reference to Exhibit 10.2 to the 2/12/14 Form 8-K.

10.5		Guaranty Agreement dated as of February 7, 2014 made by Independence Realty Operating Partnership, LP, as guarantor, for the benefit of Bank of America, N.A., as lender, incorporated by reference to Exhibit 10.2 to the 2/12/14 Form 8-K.

10.6		Purchase and Sale Agreement dated as of February 27, 2014 among Independence Realty Operating Partnership, LP, as buyer, BCMR King’s Landing, a Limited Partnership, and MLP King’s Landing, LLC, as sellers, incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the “2013 10-K”).

10.7		Note and Mortgage Assumption Agreement dated as of February 28, 2014 among U.S. Bank National Association, a national banking association, as trustee for the registered holders of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2006-LDP7, as lender, Kola Investments, LLC, as original borrower, IRT OKC Portfolio Owner, LLC, as new borrower, together with the Joinder by and Agreement of Original Indemnitor by Allstate Management Corp. and the Joinder by and Agreement of New Indemnitor by Independence Realty Operating Partnership, LP and the Company, incorporated by reference to Exhibit 10.37 to the 2013 10-K.

10.8		Loan Agreement dated as of March 3, 2006 between Kola Investments, L.L.C., as borrower, and GMAC Commercial Mortgage Corporation, as lender, incorporated by reference to Exhibit 10.38 to the 2013 10-K.

10.9		Consolidated Amended and Restated Promissory Note dated as of March 3, 2006 between Kola Investments, L.L.C., as borrower, and GMAC Commercial Mortgage Corporation, as lender, incorporated by reference to Exhibit 10.39 to the 2013 10-K.

10.10		Guaranty dated as of March 3, 2006 by Allstate Management Corp. in favor of GMAC Commercial Mortgage Corporation, as lender, incorporated by reference to Exhibit 10.40 to the 2013 10-K.


Exhibit		Description

10.11		Environmental Indemnity Agreement dated as of March 3, 2006 by Kola Investments, L.L.C. and Allstate Management Corp. in favor of GMAC Commercial Mortgage Corporation, as lender, incorporated by reference to Exhibit 10.41 to the 2013 10-K.

10.12		Assumption and Release Agreement dated as of March 31, 2014 among the original guarantors named therein, Independence Realty Operating Partnership, LP, as the new guarantor, between King’s Landing LLC, as borrower, and Fannie Mae, as lender, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 3, 2014 (the “4/3/14 Form 8-K”).

10.13		First Amendment to Multifamily Loan and Security Agreement made as of March 31, 2014 between King’s Landing LLC, as borrower, and Fannie Mae, as lender, incorporated by reference to Exhibit 10.2 to the 4/3/14 Form 8-K.

10.14		Multifamily Loan and Security Agreement made as of May 24, 2012 between King’s Landing LLC, as borrower, and CWCapital LLC, as lender, incorporated by reference to Exhibit 10.3 to the 4/3/14 Form 8-K.

10.15		Multifamily Note dated as of May 24, 2012 made by King’s Landing LLC, as borrower, to CWCapital LLC, as lender, incorporated by reference to Exhibit 10.4 to the 4/3/14 Form 8-K.

10.16		Guaranty of Non-Recourse Obligations dated as of May 24, 2012 made by the guarantors named therein, as guarantor, to CWCapital LLC, as lender, incorporated by reference to Exhibit 10.5 to the 4/3/14 Form 8-K.

10.17		Contribution Agreement dated as of May 2, 2014 among Independence Realty Operating Partnership, LP and the contributors named therein, incorporated by reference to Exhibit 10.1 to the 5/7/14 Form 8-K.

10.18.1		Promissory Note dated May 7, 2014 (the “5/7/14 Note”) made by the makers named therein to IRT UPREIT Lender, LP (“IRT Lender”), as lender incorporated by reference to Exhibit 10.2 to the 5/7/14 Form 8-K.

10.18.2		Satisfaction of Mortgage dated July 15, 2014 by IRT Lender relating to the 5/7/14 Note, incorporated by reference to Exhibit 10.18.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.

10.19		Loan Assumption Agreement and Release dated as of May 5, 2014 effective May 7, 2014 among the transferors named therein, IRT Carrington Apartment Owner, LLC, as transferee, and IRT Lender, incorporated by reference to Exhibit 10.19 to the 2014 Q1 10-Q.

10.20		First Amendment dated as of September 9, 2014 to the Senior Revolving Credit Agreement dated as of October 25, 2013 among Independence Realty Operating Partnership, LP, as borrower, The Huntington National Bank, as lender, Independence Realty Trust, Inc., as parent guarantor, and IRT Arbors Apartments Owner, LLC, as subsidiary guarantor, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 11, 2014.

10.21		Interest Purchase and Sale Agreement dated as of October 20, 2014 by and between CRA-B1 Fund, LLC, as seller, and Independence Realty Operating Partnership, LP relating to Brookside property, filed herewith.

10.22		Interest Purchase and Sale Agreement dated as of October 20, 2014 by and between CRA-B1 Fund, LLC, as seller, and Independence Realty Operating Partnership, LP relating to Jamestown property, filed herewith.

10.23		Interest Purchase and Sale Agreement dated as of October 20, 2014 by and between CRA-B1 Fund, LLC, as seller, and Independence Realty Operating Partnership, LP relating to Meadows property, filed herewith.

10.24		Interest Purchase and Sale Agreement dated as of October 20, 2014 by and between CRA-B1 Fund, LLC, as seller, and Independence Realty Operating Partnership, LP relating to Oxmoor property, filed herewith.

10.25		Interest Purchase and Sale Agreement dated as of October 20, 2014 by and between CRA-B1 Fund, LLC, as seller, and Independence Realty Operating Partnership, LP relating to Prospect Park property, filed herewith.

12.1		Statements regarding computation of ratios as of September 30, 2014, filed herewith.

31.1		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

101		XBRL (eXtensible Business Reporting Language). The following materials, formatted in XBRL: (i) Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013, (ii) Consolidated Statements of Operations for the three-and nine-month periods ended September 30, 2014 and September 30, 2013, (iii) Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2014 and September 30, 2013, (iv) Consolidated Statements of Changes in Equity for the nine-month periods ended September 30, 2014 and (v) notes to the consolidated financial statements as of September 30, 2014.

Exhibit 4.5

ADMISSION AGREEMENT AND AMENDMENT TO FOURTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP

THIS ADMISSION AGREEMENT AND AMENDMENT (this “ Agreement ”), dated as of August 28, 2014, is entered into and among the Partnership, the General Partner and the New Limited Partners (as those terms are defined below).

WHEREAS, by Fourth Amended and Restated Agreement of Limited Partnership of Independence Realty Operating Partnership, LP dated as of May 7, 2013 (the “ Partnership Agreement ”) among Independence Realty Trust, Inc., a Maryland corporation (the “ General Partner ”), and IRT Limited Partner, LLC, a Delaware limited liability company (“ IRT ”) as a limited partner, a Delaware limited partnership was organized under the name Independence Realty Operating Partnership, LP (the “ Partnership ”); and

WHEREAS, the General Partner, pursuant to its authority under Section 4.2 of the Partnership Agreement, desires to admit the parties listed on Schedule A attached hereto as limited partners in the Partnership (each a “ New Limited Partner ” and collectively, the “ New Limited Partners ”);

WHEREAS, capitalized terms used, but not defined herein have the means assigned to them in the Partnership Agreement;

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:

1. The Partnership hereby admits each New Limited Partner as a Limited Partner in the Partnership with all of the rights and obligations of a Limited Partner in accordance with the terms and conditions of the Partnership Agreement, and the Partnership hereby issues to each New Limited Partner the number of Common Units stated opposite such New Limited Partner’s name on Schedule A attached hereto. Each New Limited Partner has made a Capital Contribution of Contributed Property in exchange for such Common Unit(s).

2. Exhibit A to the Partnership Agreement is hereby amended and restated as set forth in Schedule B attached hereto.

3. The New Limited Partners have contributed as of the date hereof their respective ownership interests in and to that certain real property and the improvements thereon commonly known as Walnut Hills Apartments located at 8920 Walnut Grove Road, Memphis, TN, which shall be deemed Contributed Property, the Gross Asset Value of each New Limited Partner’s Contributed Property is stated opposite such New Limited Partner’s name on Schedule A attached hereto, and each New Limited Partner’s Capital Account shall have a credit of such amount.

4. The New Limited Partners hereby join in and agree to be bound as Limited Partners by the Partnership Agreement, as amended hereby, including without limitation the power of attorney granted in Section 2.4 of the Partnership Agreement.

5. The New Limited Partners, the General Partner and the Partnership are executing as of the date hereof that certain Exchange Rights Agreement.

6. This Agreement may be executed in counterparts.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.


PARTNERSHIP:

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP , a Delaware limited partnership

By:	Independence Realty Trust, Inc., a Maryland corporation, its general partner

	By:	Independence Realty Advisors, LLC, a Delaware limited liability company, its authorized agent

		By:	/s/ Farrell Ender
			Farrell Ender, President

GENERAL PARTNER:

INDEPENDENCE REALTY TRUST, INC. , a Maryland corporation

	By:	Independence Realty Advisors, LLC, a Delaware limited liability company, its authorized agent

		By:	/s/ Farrell Ender
			Farrell Ender, President

[SIGNATURES CONTINUE ON NEXT PAGE]

[Admission Agreement and Amendment to OP Agreement]


NEW LIMITED PARTNERS:

USA Walnut Hill 1, LLC ,
a Delaware limited liability company

By:	The Brovelli Family Trust 2B
	Its Sole Member

	By:	/s/ Edmond F. Brovelli, Jr.
		Edmond F. Brovelli, Jr., Trustee

[SIGNATURES FOLLOW ON NEXT PAGE]

[Admission Agreement and Amendment to OP Agreement]


USA Walnut Hill 8, LLC ,
a Delaware limited liability company

By:		William H. and Diana R. Bradshaw
		Its Sole Member

By:		/s/ William H. Bradshaw
		William H. Bradshaw

By:		/s/ Diana R. Bradshaw
		Diana R. Bradshaw

[SIGNATURES FOLLOW ON NEXT PAGE]

[Admission Agreement and Amendment to OP Agreement]


USA Walnut Hill 9, LLC ,
a Delaware limited liability company

By:		/s/ Phillip Steinschreiber
		Phillip Steinschreiber
		Its Sole Member

[SIGNATURES FOLLOW ON NEXT PAGE]

[Admission Agreement and Amendment to OP Agreement]


USA Walnut Hill 19, LLC ,
a Delaware limited liability company

By:	Mittman Associates, Inc., a New York corporation
	Its Sole Member

	By:	/s/ Ellen S. Davis
		Ellen S. Davis, Secretary

[SIGNATURES FOLLOW ON NEXT PAGE]

[Admission Agreement and Amendment to OP Agreement]


USA Walnut Hill 4, LLC ,
a Delaware limited liability company

By:		/s/ Robert E. Batey
		Robert E. Batey
		Its Sole Member

[SIGNATURES FOLLOW ON NEXT PAGE]

[Admission Agreement and Amendment to OP Agreement]

SCHEDULE A

NEW LIMITED PARTNERS’ PARTNERSHIP INTERESTS


New Limited Partner:	Gross Asset Value		Common Units
USA Walnut Hill 1, LLC	$	516,977.29		51,566.24
USA Walnut Hill 4, LLC	$	96,412.63		9,616.74
USA Walnut Hill 8, LLC	$	300,000.00		29,923.69
USA Walnut Hill 9, LLC	$	193,102.53		19,261.14
USA Walnut Hill 19, LLC	$	270,618.00		26,992.97

[Admission Agreement and Amendment to OP Agreement]

SCHEDULE B

PARTNERS’ PARTNERSHIP INTERESTS

[SEE ATTACHED]

[Admission Agreement and Amendment to OP Agreement]

Partners’ Partnership Interests

As of August 28, 2014


Name and Address of Partner	Type of Interest	Number of Common Units

*General Partner:*

Independence Realty Trust, Inc., as General Partner Cira Centre 2929 Arch Street, 17 ^th Floor Philadelphia, PA 19104	General Partnership Interest		25,801,439.837

*Limited Partners:*

IRT Limited Partner, LLC, as an Initial Limited Partner Cira Centre 2929 Arch Street, 17 ^th Floor Philadelphia, PA 19104	Limited Partnership Interest		100

USA Carrington Park 4, LLC c/o Mike Spalding 18 Buckthorn Drive Littleton, CO 80127	Limited Partnership Interest		10,585.83

USA Carrington Park 5, LLC c/o Paula Spalding 18 Buckthorn Drive Littleton, CO 80127	Limited Partnership Interest		10,585.83

USA Carrington Park 7, LLC c/o J.D. Nock and Helmtrud S. Nock Revocable Trust DTD 12/18/98 8655 Skyline Blvd. Oakland, CA 94611	Limited Partnership Interest		24,303.19

USA Carrington Park 11, LLC c/o Glenn W. Baldwin 445 Sangamon Lane Dixon, IL 61021	Limited Partnership Interest		16,261.98



USA Carrington Park 12, LLC c/o The Scott/Erquiaga Trust, Gregory R. Scott, Gene X. Erquiaga, Trustees 5839 Overlake Ave. San Diego, CA 92120	Limited Partnership Interest	10,848.62

USA Carrington Park 13, LLC c/o Sonja Bjork 1219 Peralta Ave. Berkeley, CA 94706	Limited Partnership Interest	7,804.70

USA Carrington Park 14, LLC c/o Tanja M. Schlosser 1219 Peralta Ave. Berkely, CA 94706	Limited Partnership Interest	7,804.70

USA Carrington Park 16, LLC c/o Florence W. Danneberg 835 McFarlane Avenue Sebastopol, CA 95472	Limited Partnership Interest	11,207.76

USA Carrington Park 19, LLC c/o Canelo Family Partnership, L.P., Sally Canelo, General Partner 2980 Florist Lane Merced, CA 95340	Limited Partnership Interest	24,294.42

USA Carrington Park 20, LLC c/o The Brovelli Family Trust 2A, Edmond F. Brovelli, Jr., Trustee 9 Ridgetop Way Napa, CA 94558	Limited Partnership Interest	87,148.09

USA Carrington Park 23, LLC c/o Alois and Joan Lamprecht, as husband and wife 21213 B. Hawthorne Blvd. Torrance, CA 90503	Limited Partnership Interest	11,216.55

USA Walnut Hill 1, LLC c/o The Brovelli Family Trust 2A, Edmond F. Brovelli, Jr., Trustee 9 Ridgetop Way Napa, CA 94558	Limited Partnership Interest	51,566.24



USA Walnut Hill 4, LLC c/o Robert E. Batey 500 Elmington Avenue, #501 Nashville, TN 37205	Limited Partnership Interest	9,616.74

USA Walnut Hill 8, LLC c/o William H. Bradshaw and Diana R. Bradshaw 3927 Lighthouse Place Discovery Bay, CA 94505	Limited Partnership Interest	29,923.69

USA Walnut Hill 9, LLC c/o Phillip Steinschreiber 1976 Summit Lake Drive Angwin, CA 94508	Limited Partnership Interest	19,261.14

USA Walnut Hill 19, LLC c/o Mittman Associates, Inc., a New York corporation 10467 E. Raintree Drive Scottsdale, Arizona 85255 Attn: Ellen S. Davis, Secretary	Limited Partnership Interest	26,992.97

Exhibit 4.6

EXCHANGE RIGHTS AGREEMENT

THIS EXCHANGE RIGHTS AGREEMENT (this “ Agreement ”), dated as of August 28, 2014, is entered into by and among Independence Realty Trust, Inc., a Maryland corporation (the “ Company ”), Independence Realty Operating Partnership, LP, a Delaware limited partnership (the “ Operating Partnership ”), and the Persons whose names are set forth on Exhibit A attached hereto (as it may be amended from time to time).

R E C I T A L S :

(1)

The Company, together with certain other limited partners, has entered into the Fourth Amended and Restated Agreement of Limited Partnership of the Operating Partnership dated May 7, 2013 (as such agreement may be amended or amended and restated from time to time, the “ Partnership Agreement ”).

(2)	Pursuant to the Partnership Agreement, the Limited Partners (as defined below) directly or indirectly hold common units of limited partnership interest (“ Partnership Units ”) in the Operating Partnership.

(3)	The Operating Partnership has agreed to provide the Limited Partners with certain direct or indirect rights to exchange their Partnership Units for cash or, at the election of the Company, for shares of the Company’s common stock, $0.01 par value per share (the “ REIT Stock ”).

Accordingly, the parties hereto do hereby agree as follows:

ARTICLE I

DEFINED TERMS

The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

“Assignee” means a Person to whom one or more Partnership Units have been transferred in a manner permitted under the Partnership Agreement, but who has not become a substituted Limited Partner in accordance therewith.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

“Capital Contribution” means, with respect to any Partner, any cash, cash equivalents or the Gross Asset Value (as defined in the Partnership Agreement) of property which such Partner contributes or is deemed to contribute to the Partnership pursuant to the terms of the Partnership Agreement.

“Cash Amount” means an amount of cash per Partnership Unit equal to the Value on the Valuation Date of the REIT Stock Amount.

“Exchange Factor” means 1.0, provided, that in the event that the Company (i) declares or pays a dividend on its outstanding REIT Stock in the form of shares of REIT Stock or makes a distribution to all holders of its outstanding REIT Stock in the form of shares of REIT Stock; (ii) subdivides its outstanding REIT Stock; or (iii) combines its outstanding REIT Stock into a smaller number of shares of REIT Stock, the Exchange Factor shall be adjusted by multiplying the Exchange Factor by a fraction, the numerator of which shall be the number of shares of REIT Stock issued and outstanding on the record date for such dividend, contribution, subdivision or combination (assuming for such purpose that such dividend, distribution, subdivision or combination has occurred as of such time), and the denominator of which shall be the actual number of shares of REIT Stock (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Exchange Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. Notwithstanding the foregoing, the Exchange Factor shall not be adjusted in connection with such event if, in connection with such event, the Operating Partnership make a distribution of cash. Partnership Units, REIT Stock and/or rights, options or warrants to acquire Partnership Units and/or REIT Stock with respect to all applicable Partnership Units or effects a reverse split of, or otherwise combines, the Partnership Units, as applicable, that is comparable as a whole in all material respects with such an event.

“Exchanging Partner” has the meaning set forth in Section 2.1 hereof.

“Exchange Right” has the meaning set forth in Section 2.1 hereof.

“Lien” means any lien, security interest, mortgage, deed of trust, charge, claim, encumbrance, pledge, option, right of first offer or first refusal and any other right or interest of others of any kind or nature, actual or contingent, or other similar encumbrance of any nature whatsoever.

“Limited Partner” means any Person, other than the Company, named as a Limited Partner on Exhibit A, as such Exhibit may be amended from time to time.

“Notice of Exchange” means the Notice of Exchange substantially in the form of Exhibit B to this Agreement.

“Person” shall mean an individual, partnership, corporation, limited liability company, trust, estate, or unincorporated organization, or other entity, or a government or agency or political subdivision thereof.

“REIT Stock Amount” means that number of shares of REIT Stock equal to the product of the number of Partnership Units offered for exchange by an Exchanging Partner, multiplied by the Exchange Factor as of the Valuation Date, provided, that in the event the Company or the Operating Partnership issues to all holders of REIT Stock rights, options, warrants or convertible or exchangeable securities entitling the stockholders to subscribe for or purchase REIT Stock, or any other securities or property (collectively, the “rights”), then the REIT Stock Amount shall also include such rights that a holder of that number of shares of REIT Stock would be entitled to receive.

“SEC” means the Securities and Exchange Commission.

“Specified Exchange Date” means the tenth (10th) Business Day after receipt by the Operating Partnership and the Company of a Notice of Exchange; provided, however, that if the Operating Partnership has more than 99 partners, as determined in accordance with the provisions of Treasury Regulation Section 1.7704-1(h), then the Specified Exchange Date shall mean the thirty-first (31st) calendar day after receipt by the Operating Partnership and the Company of a Notice of Exchange.

“Valuation Date” means the date of receipt by the Operating Partnership and the Company of a Notice of Exchange or, if such date is not a Business Day, the first Business Day thereafter.

“Value” means, with respect to shares of REIT Stock, the average of the daily market price for the five (5) consecutive trading days immediately preceding the Valuation Date. The market price for each such trading day shall be:

(i) if the REIT Stock is listed or admitted to trading on the New York Stock Exchange (the “ NYSE ”) or any other national securities exchange, the closing price on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day; or

(ii) if the REIT Stock is not listed or admitted to trading on the NYSE or any other national securities exchange, the last reported sale price on such day; or

(iii) if no sale takes place on such day, the average of the closing bid and asked prices on such day, as reported by a reliable quotation source designated by the Company or if the REIT Stock is not then traded on any market, as determined in good faith by the Company’s Independent Directors (as defined by the Company’s charter).

In the event the REIT Stock Amount includes rights that a holder of REIT Stock would be entitled to receive, then the Value of such rights shall be determined by the independent directors of the Company acting in good faith on the basis of such quotations and other information as they consider, in their reasonable judgment, appropriate.

ARTICLE II

EXCHANGE RIGHT

2.1 Exchange Right . (a) Subject to Sections 2.2, 2.3, 2.4 and 2.5 hereof, and subject to any limitations under applicable law, the Operating Partnership hereby grants to each Limited Partner and each Limited Partner hereby accepts the right (the “ Exchange Right ”), exercisable on or after the date that is one year after the issuance of the Limited Partner’s Limited Partnership Interest to exchange on a Specified Exchange Date all or a portion of the Partnership Units held by such Limited Partner at an exchange price equal to and in the form of the Cash Amount.

(b) The Exchange Right shall be exercised pursuant to a Notice of Exchange delivered to the Operating Partnership, with a copy delivered to the Company, by the Limited Partner who is exercising the Exchange Right (the “ Exchanging Partner ”); provided, however, that the Company, in its capacity as General Partner of the Operating Partnership, may elect, after a Notice of Exchange is delivered, to satisfy the Exchange Right which is the subject of such notice in accordance with Section 2.2.

(c) A Limited Partner may exercise the Exchange Right in accordance with the terms of this Agreement from time to time with respect to part or all of the Partnership Units that it owns, as selected by the Limited Partner, provided that, except as provided in the Agreement, a Limited Partner may not exercise the Exchange Right for less than one thousand (1,000) Partnership Units unless such Limited Partner then holds less than one thousand (1,000) Partnership Units, in which event the Limited Partner must exercise the Exchange Right for all of the Partnership Units held by such Limited Partner.

(d) An Exchanging Partner shall have no right with respect to any Partnership Units so exchanged to receive any distributions paid after the Specified Exchange Date with respect to such Partnership Units.

(e) Any Assignee of a Limited Partner may exercise the rights of such Limited Partner pursuant to this Article 2, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee.

(f) In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount or the REIT Stock Amount, as the case may be, shall be satisfied by the Operating Partnership or the Company, as the case may be, directly to such Assignee and not to such Limited Partner.

2.2 Option of Company to Exchange for REIT Stock . (a) Notwithstanding the provisions of Section 2.1, the Company may, in its capacity as the General Partner of the Operating Partnership, in its sole and absolute discretion (subject to the limitations on ownership and transfer of REIT Stock set forth in the Company’s charter), elect to assume directly and satisfy an Exchanging Partner’s Exchange Right by exchanging REIT Stock and rights equal to the REIT Stock Amount on the Specified Exchange Date for the Partnership Units offered for exchange by the Exchanging Partner, whereupon the Company shall acquire the Partnership Units offered for exchange by the Exchanging Partner and shall be treated for all purposes of the Partnership Agreement as the owner of such Partnership Units. Unless the Company, in its sole and absolute discretion, shall exercise its right to assume directly and satisfy the Exchange Right, the Company shall not have any obligation to the Exchanging Partner or to the Operating Partnership with respect to the Exchanging Partner’s exercise of the Exchange Right. If the Company shall exercise its right to satisfy the Exchange Right in the manner described in the first sentence of this Section 2.2 and shall fully perform its obligations in connection therewith, the Operating Partnership shall have no right or obligation to pay any amount to the Exchanging Partner with respect to such Exchanging Partner’s exercise of the Exchange Right, and each of the Exchanging Partner, the Operating Partnership and the Company shall, for federal income tax purposes, treat the transaction between the Company and the Exchanging Partner as a sale of the

Exchanging Partner’s Partnership Units to the Company. Nothing contained in this Section 2.2 shall imply any right of the Company to require any Limited Partner to exercise the Exchange Right afforded to such Limited Partner pursuant to Section 2.1.

(b) In the event the Company shall elect to satisfy, on behalf of the Operating Partnership, an Exchanging Partner’s Exchange Right by exchanging REIT Stock for the Partnership Units offered for exchange,

(i) the Company hereby agrees so to notify the Exchanging Partner within five (5) Business Days after the receipt by the Company of such Notice of Exchange,

(ii) each Exchanging Partner hereby agrees to execute such documents and instruments as the Company may reasonably require in connection with the issuance of REIT Stock upon exercise of the Exchange Right, and

(iii) the Company hereby agrees to deliver stock certificates representing fully paid and nonassessable shares of REIT Stock on the Specified Exchange Date.

2.3 Prohibition of Exchange for REIT Stock . Notwithstanding anything herein to the contrary, the Company shall not be entitled to satisfy an Exchanging Partner’s Exchange Right pursuant to Section 2.2 if the delivery of REIT Stock to such Limited Partner by the Company pursuant to Section 2.2 (regardless of the Operating Partnership’s obligations to the Limited Partner under Section 2.1).

(a) would be prohibited under the Articles of Incorporation of the Company,

(b) if the Company has elected REIT status, would otherwise jeopardize the REIT status of the Company, or

(c) would cause the acquisition of the REIT Stock by the Limited Partner to be “integrated” with any other distribution of REIT Stock by the Company for purposes of complying with the registration provisions of the Securities Act.

2.4 Payment Date . Any Cash Amount to be paid to an Exchanging Partner shall be paid on the Specified Exchange Date; provided, however, that the Operating Partnership may elect to cause the Specified Exchange Date to be delayed for up to an additional 90 days to the extent required for the Company to cause additional REIT Stock to be issued to provide financing to be used to make such payment of the Cash Amount by the Operating Partnership.

2.5 Expiration of Exchange Right . The Exchange Right shall expire with respect to any Partnership Units for which an Exchange Notice has not been delivered to the Operating Partnership and the Company on or before December 31, 2040.

2.6 Effect of Exchange . (a) Any exchange of Partnership Units pursuant to this Article 2 shall be deemed to have occurred as of the Specified Exchange Date for all purposes,

including without limitation the payment of distributions or dividends in respect of Partnership Units or REIT Stock, as applicable.

(b) Any Partnership Units acquired by the Company pursuant to an exercise by any Limited Partner of an Exchange Right shall be deemed to be acquired by and reallocated or reissued to the Company.

(c) The Company, as general partner of the Operating Partnership, shall amend the Partnership Agreement to reflect each such exchange and reallocation or reissuance of Partnership Units and each corresponding recalculation of the Partnership Units of the Limited Partners.

ARTICLE III

OTHER PROVISIONS

3.1 Covenants of the Company . (a) At all times during the pendency of the Exchange Right, the Company shall reserve for issuance such number of shares of REIT Stock as may be necessary to enable the Company to issue such shares in full payment of the REIT Stock Amount in regard to all Partnership Units held by Limited Partners which are from time to time outstanding.

(b) During the pendency of the Exchange Right, the Company shall deliver to Limited Partners in a timely manner all reports filed by the Company with the SEC to the extent the Company also transmits such reports to its stockholders and all other communications transmitted from time to time by the Company to its stockholders generally.

(c) The Company shall notify each Limited Partner, upon request, of the then current Exchange Factor and such notice will include a reasonable explanation of the Exchange Factor calculation to be applied at such time,

3.2 Fractional Shares . (a) No fractional shares of REIT Stock shall be issued upon exchange of Partnership Units.

(b) The number of full shares of REIT Stock which shall be issuable upon exchange of Partnership Units (or the cash equivalent amount thereof if the Cash Amount is paid) shall be computed on the basis of the aggregate amount of Partnership Units so surrendered.

(c) Instead of any fractional shares of REIT Stock which would otherwise be issuable upon exchange of any Partnership Units, the Operating Partnership shall pay a cash adjustment in respect of such fraction in an amount equal to the Cash Amount of a Partnership Unit multiplied by such fraction.

3.3 Investment Representations and Warranties . By delivering to the Company a Notice of Exchange, each Exchanging Partner will be deemed to represent and warrant to the Company and the Operating Partnership that such Exchanging Partner is aware of the

Company’s option to exchange such Exchanging Partner’s Partnership Units for REIT Stock pursuant to Section 2.2 hereof and that;

(a) (i) such Exchanging Partner has reviewed (1) if the Company is required to file reports under the Securities Exchange Act of 1934, as amended, (the “ Exchange Act ”) copies of all reports and other filings (the “ SEC Reports ”), in the form filed on the SEC’s Electronic Data Gathering, Analysis and Retrieval system, including Annual Reports on Form 10-K, Quarterly Reports on Form 10- Q and Current Reports on Form 8-K, made by the Company with the SEC pursuant to the Exchange Act, and the rules and regulations thereunder, and understands the risks of, and other considerations relating to, an investment in REIT Stock or (2) if the Company is not required to file SEC reports, such information regarding the business, operations, financial condition, assets and liabilities of the Company as the Exchanging Partner deems necessary and appropriate in connection with the receipt of REIT Stock to the extent any such information is provided by the Company to the Exchanging Partner.

(ii) Such Exchanging Partner, by reason of its business and financial experience, together with the business and financial experience of those persons, if any, retained by it to represent or advise it with respect to its investment in REIT Stock,

(A) has such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that it is capable of evaluating the merits and risks of and of making an informed investment decision with respect to an investment in REIT Stock,

(B) is capable of protecting its own interest or has engaged representatives or advisors to assist it in protecting its interests and

(iii) (A) Such Exchanging Partner is an “accredited investor” as defined in Rule 501 of the regulations promulgated under the Securities Act.

(B) If such Exchanging Partner has retained or retains a person to represent or advise it with respect to its investment in REIT Stock, such Exchanging Partner will advise the Company of such retention and, at the Company’s request, such Exchanging Partner shall, prior to or at delivery of the REIT Stock hereunder,

(I) acknowledge in writing such representation and

(II) cause such representative or advisor to deliver a certificate to the Company containing such representations as may be reasonably requested by the Company.

(b) (i) Such Exchanging Partner understands that an investment in the Company involves substantial risks.

(ii) Such Exchanging Partner has been given the opportunity to make a thorough investigation of the activities of the Company and has been furnished with materials relating to the Company and its activities, including, without limitation, each Prospectus and the SEC Reports.

(iii) Such Exchanging Partner has relied and is making its investment decision based upon the Prospectus/Consent Solicitation Statement relating to the Consolidation and any subsequent Prospectus, the SEC Reports and other written information provided to the Exchanging Partner by or on behalf of the Company and, as applicable, such Exchanging Partner’s position as a director or executive officer of the Company.

(c) (i) The REIT Stock to be issued to such Exchanging Partner hereunder will be acquired by such Exchanging Partner for its own account, for investment only and not with a view to, or with any intention of, a distribution or resale thereof, in whole or in part, or the grant of any participation therein.

(ii) Such Exchanging Partner was not formed for the specific purpose of acquiring an interest in the Company.

(d) (i) Such Exchanging Partner acknowledges that

(A) the shares of REIT Stock to be issued to such Exchanging Partner hereunder have not been registered under the Securities Act or state securities laws by reason of a specific exemption or exemptions from registration under the Securities Act and applicable state securities laws and, the certificates representing such shares of REIT Stock will bear a legend to such effect,

(B) the Company’s and the Operating Partnership’s reliance on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties of such Exchanging Partner contained herein,

(C) the REIT Stock to be issued to such Exchanging Partner hereunder may not be resold or otherwise distributed unless registered under the Securities Act and applicable state securities laws, or unless an exemption from registration is available,

(D) there may be no market for unregistered shares of REIT Stock, and

(E) the Company has no obligation or intention to register such REIT Stock under the Securities Act or any state securities laws or to take

any action that would make available any exemption from the registration requirements of such laws.

(ii) Such Exchanging Partner acknowledges that because of the restrictions on transfer or assignment of such REIT Stock to be issued hereunder, such Exchanging Partner may have to bear the economic risk of its investment in REIT Stock issued hereunder for an indefinite period of time.

(e) The address set forth under such Exchanging Partner’s name in the Notice of Exchange is the address of the Exchanging Partner’s principal place of business or, if a natural person, the address of the Exchanging Partner’s residence, and such Exchanging Partner has no present intention of becoming a resident of any country, state or jurisdiction other than the country and state in which such principal place of business or residence is situated.

ARTICLE IV

GENERAL PROVISIONS

4.1 Addresses and Notice . Any notice, demand, request or report required or permitted to be given or made to the Operating Partnership, the Company, a Limited Partner or Assignee, as the case may be, under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or by other similarly reliable means of written communication to the Operating Partnership, the Company, a Limited Partner or Assignee, as the case may be, at the address listed on the records of the Operating Partnership.

4.2 Titles and Captions . All article or section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to “Articles” and “Sections” are to Articles and Sections of this Agreement.

4.3 Pronouns and Plurals . Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

4.4 Further Action and Additional Restrictions . The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

4.5 Binding Effect . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, legal representatives and permitted assigns.

4.6 Waiver . No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

4.7 Counterparts . This Agreement may be executed in counterparts, all of which together shall constitute one agreement binding on all of the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

4.8 Applicable Law . This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law thereof.

4.9 Invalidity of Provisions . If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

4.10 Entire Agreement . This Agreement contains the entire understanding and agreement among the Limited Partners, the Operating Partnership and the Company with respect to the subject matter hereof and supersedes any other prior written or oral understandings or agreements among them with respect thereto.

4.11 Amendment . This Agreement may be amended from time to time with the consent of the Company by a vote of the Limited Partners in the same manner as the Partnership Agreement (in accordance with Section 14.1(a) thereof) may be amended as provided therein, provided, however, that the Company shall vote its limited partnership interests in proportion to the votes of the other Limited Partners.

IN WITNESS WHEREOF, the parties hereto have executed this Exchange Rights Agreement as of the date first written above.


THE COMPANY:

INDEPENDENCE REALTY TRUST, INC. , a Maryland corporation,

By:	Independence Realty Advisors, LLC, a Delaware limited liability company, its authorized agent

	By:	/s/ Farrell Ender
		Farrell Ender, President

OPERATING PARTNERSHIP:

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP, a Delaware limited partnership

By:	Independence Realty Trust, Inc., a Maryland
	corporation, its general partner

	By: Independence Realty Advisors, LLC, a Delaware limited liability company, its authorized agent

		By:	/s/ Farrell Ender
			Farrell Ender, President

[Signatures continue on next page.]

[Exchange Rights Agreement]


LIMITED PARTNERS:

USA Walnut Hill 1, LLC , a Delaware limited liability company

By:	The Brovelli Family Trust 2B
	Its Sole Member

	By:	/s/ Edmond F. Brovelli, Jr.
		Edmond F. Brovelli, Jr., Trustee

[SIGNATURES FOLLOW ON NEXT PAGE]

[Exchange Rights Agreement]


USA Walnut Hill 8, LLC ,
a Delaware limited liability company

By:		William H. and Diana R. Bradshaw
		Its Sole Member

By:		/s/ William H. Bradshaw
		William H. Bradshaw

By:		/s/ Diana R. Bradshaw
		Diana R. Bradshaw

[SIGNATURES FOLLOW ON NEXT PAGE]

[Exchange Rights Agreement]


USA Walnut Hill 9, LLC ,
a Delaware limited liability company

By:		/s/ Phillip Steinschreiber
		Phillip Steinschreiber
		Its Sole Member

[SIGNATURES FOLLOW ON NEXT PAGE]

[Exchange Rights Agreement]


USA Walnut Hill 19, LLC ,
a Delaware limited liability company

By:	Mittman Associates, Inc.,
	a New York corporation
	Its Sole Member

	By:	/s/ Ellen S. Davis
		Ellen S. Davis, Secretary

[SIGNATURES FOLLOW ON NEXT PAGE]

[Exchange Rights Agreement]


USA Walnut Hill 4, LLC ,
a Delaware limited liability company

By:		/s/ Robert E. Batey
		Robert E. Batey
		Its Sole Member

[SIGNATURES FOLLOW ON NEXT PAGE]

[Exchange Rights Agreement]

Exhibit A - Exchange Rights Agreement

Name and Address of Limited Partners

USA Walnut Hill 1, LLC

P.O. Box 878

Napa, CA 94559

USA Walnut Hill 4, LLC

500 Elmington Avenue #501

Nashville, TN 37205

USA Walnut Hill 8, LLC

3927 Lighthouse Place

Discovery Bay, CA 94505

USA Walnut Hill 9, LLC

1976 Summit Lake Drive

Angwin, CA 94508

USA Walnut Hill 19, LLC

10467 E. Raintree Drive

Scottsdale, AZ 85255

Exhibit B - Exchange Rights Agreement

Notice of Exchange

The undersigned Limited Partner hereby irrevocably (i) exchanges Partnership Units in Independence Realty Operating Partnership, LP, in accordance with the terms of the Exchange Rights Agreement, dated as of , 20 (the “ Exchange Rights Agreement ”), and the Exchange Right referred to therein; (ii) surrenders such Partnership Units and all right, title and interest therein; and (iii) directs that the Cash Amount or REIT Stock Amount (as determined by the Company) deliverable upon exercise of the Exchange Right be delivered to the address specified below, and if REIT Stock is to be delivered, such REIT Stock will be registered or placed in the name(s) and at the address(es) specified below. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Exchange Rights Agreement.

The undersigned hereby represents, warrants, and certifies that the undersigned (a) has marketable and unencumbered title to such Partnership Units, free and clear, other than any encumbrance arising pursuant to the Partnership Agreement, of the rights or interests of any other person or entity; (b) has the full right, power, and authority to exchange and surrender such Partnership Units as provided herein; and (c) has obtained the consent or approval of all persons or entities, if any, (other than consent or approval that may be required of the Company or the Operating Partnership) having the right to consent or approve such exchange and surrender on the part of the undersigned.

The undersigned hereby makes the representations and warranties contained in Section 3.3 of the Exchange Rights Agreement as if such representations and warranties had been set forth in foil in this Notice of Exchange.


Dated:
	Name of Limited Partner (Please Print)

Signature guaranteed by:


	(Signature of Limited Partner)




	(Street Address)


	(City) (State)	(Zip Code)


	If REIT Stock is to be issued, issue to:

Exhibit 10.21

Execution

BROOKSIDE

INTEREST PURCHASE AND SALE AGREEMENT

by and between

CRA-B1 FUND, LLC,

as Seller

and

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP,

as Purchaser

Dated as of October 20, 2014

Table of Contents



		Page

ARTICLE I. PURCHASE AND SALE			1

Section 1.1.	Agreement of Purchase and Sale.		1

Section 1.2.	Purchase Price.		1

Section 1.3.	Purchase Price Allocation.		1

Section 1.4.	Payment of the Purchase Price.		2

Section 1.5.	Deposit.		2

Section 1.6.	Escrow Agent.		2

ARTICLE II. TITLE AND SURVEY; DUE DILIGENCE PERIOD			3

Section 2.1.	Seller Diligence Deliveries.		3

Section 2.2.	Title Review.		3

Section 2.3.	Due Diligence Period.		5

Section 2.4.	Right of Termination.		6

Section 2.5.	No Reliance.		6

Section 2.6.	As-Is, Where-Is.		7

Section 2.7.	Environmental Waiver and Release.		8

Section 2.8.	Survival.		8

ARTICLE III. REPRESENTATIONS, WARRANTIES AND COVENANTS			8

Section 3.1.	Representations and Warranties of Seller.		8

Section 3.2.	Seller’s Covenants.		13

Section 3.3.	Representations and Warranties of Purchaser.		14

Section 3.4.	Purchaser’s Covenants.		15

Section 3.5.	No Brokers.		15

Section 3.6.	Survival; Limitation on Liability of Seller Parties.		15

ARTICLE IV. CLOSING			16

Section 4.1.	Closing Date.		16

Section 4.2.	Closing Costs.		16

Section 4.3.	Conditions Precedent to the Obligations of Seller.		16

Section 4.4.	Conditions Precedent to the Obligations of Purchaser.		17

Section 4.5.	Credits and Prorations.		18

Section 4.6.	Seller’s Obligations at Closing.		20

Section 4.7.	Purchaser’s Obligations at Closing.		21

Section 4.8.	Application of Purchase Price to Monetary Liens at Closing.		22

ARTICLE V. RISK OF LOSS			22

Section 5.1.	Minor Damage.		22

Section 5.2.	Major Damage.		22

Table of Contents (continued)



		Page

ARTICLE VI. DEFAULT AND REMEDIES			23

Section 6.1.	Default by Seller; Purchaser’s Remedies.		23

Section 6.2.	Default by Purchaser; Seller’s Remedies.		23

Section 6.3.	Indemnification Obligations.		24

Section 6.4.	Limitation on Seller Parties’ Personal Liability.		24

ARTICLE VII. MISCELLANEOUS			25

Section 7.1.	Confidentiality.		25

Section 7.2.	Seller Confidentiality and Trading.		26

Section 7.3.	Record Access and Retention.		26

Section 7.4.	Related Agreements.		26

Section 7.5.	Assignment.		27

Section 7.6.	Notices.		27

Section 7.7.	Modifications.		28

Section 7.8.	Entire Agreement.		28

Section 7.9.	Further Assurances.		28

Section 7.10.	Counterparts.		28

Section 7.11.	Electronic or Facsimile Signatures.		28

Section 7.12.	Severability.		29

Section 7.13.	Applicable Law.		29

Section 7.14.	No Third-Party Beneficiaries.		29

Section 7.15.	No Recordation.		29

Section 7.16.	Prevailing Party.		29

Section 7.17.	Computation of Time Periods.		29

Section 7.18.	Captions.		30

Section 7.19.	Construction.		30

Section 7.20.	Tax Matters.		30

ARTICLE VIII. DEFINED TERMS			33

Section 8.1.	Defined Terms.		33

Table of Contents


	Page

List of Schedules and Exhibits

Schedule 1.3 – Allocation of Purchase Price		1
Schedule 2.2(c) – Alternate Title Insurance Companies		2
Schedule 3.1(o) – Brokerage Agreements		3
Schedule 3.1(x) – Company’s Organizational Documents		4

Exhibit A – Description of Land		5
Exhibit B – Seller Diligence Deliveries		6
Exhibit C – Rent Roll		8
Exhibit D – Form of Assignment and Assumption of Membership Interests		9
Exhibit E – Form of FIRPTA Affidavit		12

iii

INTEREST PURCHASE AND SALE AGREEMENT

This Interest Purchase and Sale Agreement (this “ Agreement ”) is made and effective as of October 20, 2014 (the “ Effective Date ”) by and between CRA-B1 FUND, LLC, a Delaware limited liability company (“ Seller ”), and INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP, a Delaware limited partnership (“ Purchaser ”).

RECITALS

A. Seller owns 100% of the limited liability company interests (the “ Interests ”) in Brookside CRA-B1, LLC, a Delaware limited liability company (the “ Company ”).

B. The Company owns the parcel of land located at 8117 Copper Creek Drive, Louisville, KY 40222 and described more particularly in Exhibit A attached hereto and made a part hereof, together with all rights and appurtenances pertaining to such property, including any right, title and interest of the Company in and to adjacent streets, alleys, easements or rights-of-way, together with any improvements thereon, but subject to the Permitted Exceptions (collectively, the “ Property ”).

C. Purchaser desires to purchase the Interests and Seller desires to sell the Interests to Purchaser, subject to the terms and provisions set forth herein.

AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:

ARTICLE I.

PURCHASE AND SALE

Section 1.1. Agreement of Purchase and Sale . Subject to the terms and conditions set forth in this Agreement, Seller agrees to sell and convey to Purchaser, and Purchaser agrees to purchase from Seller, all of Seller’s right, title and interest in and to the Interests.

Section 1.2. Purchase Price . Seller agrees to sell and Purchaser agrees to purchase the Interests for the amount of $20,000,000 (the “ Purchase Price ”).

Section 1.3. Purchase Price Allocation . Purchaser and Seller acknowledge and agree that the Purchase Price shall be allocated among the real property and the personal property comprising the Property as set forth on Schedule 1.3 attached hereto and that such allocations represent an arms’ length agreement based on Purchaser’s and Seller’ good faith judgment as to the fair market value of such real property and personal property. Purchaser and Seller shall each file all federal, state and local tax returns and related tax documents and all

other filings consistent with the allocations set forth on Schedule 1.3 . The provisions of this Section 1.3 shall survive the Closing.

Section 1.4. Payment of the Purchase Price . The Purchase Price, as increased or decreased by prorations and adjustments as herein provided, shall be payable in full at Closing as follows: (a) application of the Deposit to the Purchase Price and (b) the balance of the Purchase Price in cash by wire transfer of immediately available federal funds to a bank account designated by Seller in writing to Purchaser prior to the Closing with value to be received in such account no later than 5:00 p.m. Eastern time.

Section 1.5. Deposit . On or prior to 5:00 p.m. Eastern time on the third Business Day after the Effective Date, Purchaser shall deposit with Land Services USA, Inc. (the “ Escrow Agent ”) an amount equal to $123,078 (the “ Initial Deposit ”) in cash by wire transfer of immediately available federal funds, and failing which, Seller may terminate this Agreement by giving written notice to Purchaser. On or prior to the Expiration of the Due Diligence Period, unless Purchaser has terminated this Agreement pursuant to Section 2.4, Purchaser shall deposit with the Escrow Agent an amount equal to $123,078 (the “ Additional Deposit ”) in cash by wire transfer of immediately available federal funds, and failing which, Seller may terminate this Agreement by giving written notice to Purchaser. The Initial Deposit and the Additional Deposit, plus any interest accrued thereon, shall be collectively referred to herein as the “ Deposit ”. The Deposit shall be deemed to have been fully earned by Seller upon the execution and delivery of this Agreement and shall be non-refundable except (i) pursuant to Section 2.2(b), (ii) pursuant to Section 2.4, (iii) pursuant to Section 5.2 or (iv) in the event of a default hereunder by Seller and a termination of this Agreement by Purchaser under Section 6.1, and if the Closing occurs the Deposit shall be paid to Seller and credited against the Purchase Price at the Closing in accordance with the terms of Section 1.3. Until the Closing or earlier termination of this Agreement, the Escrow Agent shall hold the Deposit and all interest thereon and proceeds thereof subject to the terms of this Agreement.

Section 1.6. Escrow Agent .

(a) Escrow Agent shall hold and dispose of the Deposit strictly in accordance with the terms of this Agreement. Escrow Agent shall not be responsible for any interest on the Deposit except as it is actually earned, or for the loss of any interest resulting from the withdrawal of the Deposit prior to the date interest is posted thereon.

(b) It is understood and agreed that the Escrow Agent’s sole duties hereunder are as provided herein and that the Escrow Agent in the performance of its duties hereunder is hereby released and exculpated from all liability except for willful malfeasance or gross negligence and shall not be liable or responsible for anything done or omitted to be done in good faith as herein provided. If either Seller or Purchaser makes a written demand upon the Escrow Agent setting forth the basis for such demand, for payment of all or a portion of the Deposit, the Escrow Agent shall send written notice to the other party of such demand and of its intention to pay over the amount demanded within two Business Days thereafter. If before the proposed payment date the

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Escrow Agent does not receive a written objection to the proposed payment setting forth the basis for such objection, the Escrow Agent is hereby authorized and directed to make such payment. If before the proposed payment date such other party (or its counsel) delivers to the Escrow Agent a written objection to such payment setting forth the basis for such objection, the Escrow Agent shall promptly deliver a copy of such objection to the party originally demanding payment, and shall continue to hold such amount until otherwise directed by the joint written instruction of Seller and Purchaser or by a final judgment of a court which is no longer subject to, or the subject of, an appeal. In the event that a dispute shall arise as to the disposition of all or any portion of the Deposit held by the Escrow Agent, the Escrow Agent shall, at its option, either (a) commence an action of interpleader and deposit the same with a court of competent jurisdiction in the State of Kentucky (either a Kentucky or Federal Court), pending the decision of such court, and shall be entitled to rely upon the final judgment of any such court with respect to the disposition of all or any portion of the Deposit provided that such judgment is no longer subject to, or the subject of, an appeal or (b) hold the same pending receipt of joint instructions from Seller and Purchaser and shall be entitled to rely upon such joint instructions with respect to the disposition of all or any portion of the Deposit. The Escrow Agent shall be entitled to consult with counsel and be reimbursed for all reasonable expenses of such consultation with respect to its duties as Escrow Agent and shall be further entitled to be reimbursed for all reasonable out of pocket expenses incurred in connection with such activities. All such expenses shall be paid by the party whose position shall not be sustained.

(c) Each of Seller and Purchaser shall execute and deliver to the Escrow Agent an IRS Form W-9. The party receiving any portion of the interest earned on the Deposit shall pay all taxes on and with respect to the same. The Escrow Agent shall not be responsible for any diminution in value of the Purchase Price, loss of any principal or interest thereon, or penalties incurred with respect thereto, for any reason whatsoever, provided the Purchase Price has been invested by the Escrow Agent as hereinabove provided.

ARTICLE II.

TITLE AND SURVEY; DUE DILIGENCE PERIOD

Section 2.1. Seller Diligence Deliveries . Within 10 days after the Effective Date, Seller shall deliver or make available to Purchaser either at the Property or through an electronic data room the information related to the Property in Seller’s or the Company’s possession listed on Exhibit B attached hereto (the “ Seller Diligence Deliveries ”). Purchaser acknowledges that the Seller Diligence Deliveries will be delivered or made available to Purchaser by Seller as a convenience only, without any representation or warranty as to accuracy or completeness except as specifically set forth herein. Neither Seller, nor any affiliate of Seller, shall have any liability to Purchaser for any inaccuracy in or omission from such Seller Diligence Deliveries.

Section 2.2. Title Review .

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(a) On or after the Effective Date, Purchaser may order (i) a title commitment (the “ Title Commitment ”) from Land Services USA, Inc., as agent for (x) First American Title Insurance Company, (y) such other nationally recognized title insurance company mutually acceptable to Seller and Purchaser or (z) an alternate title insurance company (or alternate office) selected by Seller pursuant to Section 2.2(c) (the “ Title Company ”), together with complete and legible copies of all instruments and documents referred to therein as exceptions to title, and (ii) a survey of the Property from a reputable surveyor or surveying firm reasonably acceptable to the Title Company (the “ Survey ”) reflecting the total area of the Property, the location of all improvements, recorded easements and encroachments, if any, located thereon and all building and set back lines and plottable matters of record with respect thereto.

(b) Prior to the Expiration of the Due Diligence Period, Purchaser shall deliver written notice to Seller of any title matters, other than Permitted Exceptions, identified in the Title Commitment or shown on the Survey (or any supplements or updates thereto) which Purchaser finds objectionable (“ Title Objections ”). Seller shall have 5 Business Days from its receipt of such title objection notice from Purchaser to notify Purchaser whether Seller commits to cause such Title Objections to be removed from the land records or insured over (and with any such matters proposed to be insured over by the Title Company) at Closing, provided, however that Seller shall be obligated to remove or cause the removal from the land records of all Monetary Liens at or prior to Closing. Any matters set forth in the Title Commitment or Survey and not so objected to by Purchaser (other than Monetary Liens) shall be deemed to be Permitted Exceptions. If, for any reason, Seller is unable or unwilling to take such actions as may be required to remedy or remove from the land records any Title Objections (other than Monetary Liens) objected to by Purchaser, Seller shall give Purchaser notice thereof, it being understood and agreed that the failure of Seller to give such notice within 5 Business Days after receipt of Purchaser’s notice of objection shall be deemed an election by Seller not to remedy any such matters. If Seller shall be unable or unwilling to remedy any Title Objections (other than Monetary Liens) as to which Purchaser has objected, Purchaser may elect either (i) to terminate this Agreement by notice given to Seller within 5 Business Days following Purchaser’s receipt of Seller’s notice, whereupon the Deposit shall be refunded to Purchaser and neither party shall have any further obligations to the other hereunder, except for those obligations which expressly survive the termination of this Agreement or (ii) to proceed to Closing in accordance with the terms and conditions of this Agreement, notwithstanding such matters and without any abatement or reduction in the Purchase Price on account thereof. If any matter arises that was not previously disclosed in the Title Commitment or on the Survey (as same may have been updated), is discovered by Purchaser or by the Title Company and is added to such Title Commitment by the Title Company at or prior to Closing, Purchaser shall have five (5) Business Days (and the Closing shall be extended, if necessary) after Purchaser’s receipt of such updated Title Commitment showing the new title exception, together with a legible copy of any such new matter, to provide Seller with written notice of its objection to any such new title exception (each a “ New Objection ”, and collectively, the “ New Objections ”). If Seller does not elect to remove or cure New Objections prior to Closing (other than Monetary Liens, which Seller shall be obligated to cure), which such election shall be given by notice to Purchaser within 5 Business Days after Seller’s receipt of Purchaser’s notice setting forth such New Objections, Purchaser may, by written notice to Seller, either (i) agree to accept title subject to the exceptions which Seller is unable to remove or cause to be removed (in which case such exceptions shall be considered Permitted Exceptions) or (ii) terminate this Agreement, and in the latter event the

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Deposit and accrued interest thereon shall be returned to Purchaser, and thereafter, except for those obligations herein which are specifically stated to survive the termination of this Agreement, neither party shall have any further right, liability or obligation under this Agreement.

(c) In connection with the issuance of an ALTA 15-06 endorsement to the Title Policy at Closing, in the event that the Title Company is unable or unwilling to issue an ALTA 15-06 endorsement to the Title Policy at Closing upon terms and conditions acceptable to Seller, Seller shall have a one-time right (but not the obligation) to elect that the Title Policy be issued by an alternate title insurance company (or an alternate office of the Title Company) selected by Seller from the list of title insurance companies set forth on Schedule 2.2(c) attached hereto. In the event Seller so elects, Seller shall deliver written notice to Purchaser stating Seller’s election, Purchaser shall engage the alternate title insurance company (or alternate office of the Title Company, as applicable) selected by Seller for the purpose of issuing the Title Policy and Seller shall be responsible for 50% of any additional search and exam fees resulting from Seller’s exercise of its rights set forth in this Section 2.2(c).

Section 2.3. Due Diligence Period .

(a) During the period (the “ Due Diligence Period ”) beginning on the Effective Date and ending at 5:00 p.m. Eastern time on November 19, 2014 (the “ Expiration of the Due Diligence Period ”), Purchaser shall have the right, upon a minimum of one Business Day’s prior telephonic or written notice to Seller, to make a physical inspection of the Property, including (i) a non-invasive inspection of the environmental condition thereof and such non-invasive physical engineering and other studies and tests on the Property as Purchaser deems appropriate in its sole discretion and (ii) with Seller’s consent, which Seller may withhold in its sole discretion, further inspections of the environmental condition of the Property and further physical engineering and other studies and tests on the Property that are invasive or could alter the physical condition of the Property (including examination of materials, soil samples, and groundwater). Prior to performing any inspection or test (whether non-invasive or otherwise), Purchaser must deliver a certificate of insurance to the applicable Seller evidencing that Purchaser and its contractors, agents and representatives have in place comprehensive general liability insurance (with policy limits of at least $1,000,000 per occurrence and $2,000,000 aggregate) and for workers’ compensation insurance (with policy limits not less than statutory requirements) for its activities on the Property on terms reasonably satisfactory to Seller covering any accident arising in connection with the presence of Purchaser, its contractors, agents and representatives on the Property, which insurance shall name Seller and the Company as additional insureds thereunder and Purchaser shall bear the cost of all such inspections or tests. All third-party professional inspection companies or individuals shall be duly licensed. Notwithstanding the foregoing, Purchaser shall give no fewer than two Business Days’ notice to Seller prior to inspecting any Tenant occupied portions of the Property. Subject to the provisions of this Section 2.3, Purchaser upon prior notice to Seller may meet with the current property manager at the Property. At Purchaser’s request, and to the extent in Seller’s or the Company’s possession, Seller shall make available to Purchaser copies of the maintenance records and reports for the Property. Purchaser shall (i) exercise reasonable care at all times that Purchaser shall be present upon the Property, (ii) at Purchaser’s expense, observe and comply with all

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applicable laws and any conditions imposed by any insurance policy then in effect with respect to the Property and made known to Purchaser, (iii) not engage in any activities which would violate the provisions of any permit or license pertaining to the Property and made known to Purchaser, (iv) not unreasonably disturb the Tenants or unreasonably interfere with their use of the Property pursuant to their respective Leases, (v) not unreasonably interfere with the operation and maintenance of the Property, (vi) repair any damage to the Property resulting directly or indirectly from Purchaser’s activities at the Property and (vii) not disclose any confidential information except as permitted under this Agreement or required by applicable law. Purchaser’s obligation pursuant to clauses (vi) and (vii) above shall survive any termination of this Agreement.

(b) Purchaser understands and agrees that any on-site inspections of the Property shall occur during normal business hours after the requisite prior notice to Seller and shall be conducted in accordance with the terms hereof. Seller reserves the right to have a representative present during any such inspections and property manager interviews. If the Closing does not occur, then on request by Seller and payment by Seller to Purchaser 50% of Purchaser’s out-of-pocket costs for any requested inspection reports, Purchaser will furnish to Seller any draft of final reports received by Purchaser and requested by Seller relating to any inspections of the Property.

(c) Purchaser agrees to protect, indemnify, defend and hold Seller and the Company harmless from and against any claim for liabilities, losses, costs, expenses (including reasonable attorneys’ fees), damages or injuries arising out of or resulting from the inspection of the Property by Purchaser or its agents or consultants, excluding any liabilities, losses, costs and expenses, damages or injuries arising out of, and then only to the extent of, (i) Seller’s or the Company’s negligence or willful misconduct or (ii) any pre-existing condition discovered or revealed in the inspection of the Property by Purchaser or its agents or consultants. Purchaser’s obligation to indemnify and hold harmless Seller and the Company pursuant to this Section 2.3(c) shall survive the Closing or any termination of this Agreement.

Section 2.4. Right of Termination . At any time prior to the Expiration of the Due Diligence Period, Purchaser may elect, for any reason or no reason, to terminate this Agreement. Unless Purchaser delivers written notice to Seller prior to the Expiration of the Due Diligence Period stating that it is electing to terminate this Agreement, Purchaser shall be deemed to have waived its right to terminate this Agreement under this Section 2.4 and to have elected to proceed with the purchase of the Interests pursuant to this Agreement, and the Deposit shall be non-refundable to Purchase except as otherwise provided in this Agreement. If Purchaser timely elects to terminate this Agreement under this Section 2.4, neither party shall have any further rights or obligations hereunder (except for any indemnity obligations of either party and the provisions of this Agreement which expressly survive termination of this Agreement) and the Deposit shall be returned to Purchaser.

Section 2.5. No Reliance . Except as expressly set forth herein or in any document executed by Seller and delivered to Purchaser at Closing, Seller makes no representation or warranty as to the truth, accuracy or completeness of any materials, data or information delivered

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by Seller or its agents to Purchaser in connection with the transaction contemplated hereunder, whether occurring before, on or after the Effective Date. Purchaser acknowledges and agrees that all materials, data and information delivered by Seller to Purchaser in connection with the transaction contemplated hereunder are provided to Purchaser as a convenience only and that any reliance on or use of such materials, data or information by Purchaser is at the sole risk of Purchaser, except as expressly set forth herein or in any document executed by Seller and delivered to Purchaser at Closing. Except as specifically set forth herein or in any document executed by Seller and delivered to Purchaser at Closing, neither Seller, nor any affiliate of Seller, shall have any liability to Purchase for any inaccuracy in or omission from any such materials, data or information.

Section 2.6. As-Is, Where-Is . Except as expressly set forth herein or in any document executed by Seller and delivered to Purchaser at Closing, Seller is not making and has not at any time made any representations or warranties of any kind or character, express or implied, with respect to the Property, including, without limitation, any representations or warranties as to fitness for a particular purpose. Purchaser acknowledges and agrees that upon Closing, Seller shall sell and convey to Purchaser and Purchaser shall accept the Property “AS IS, WHERE IS, WITH ALL FAULTS”, except as expressly set forth herein or in any document executed by Seller and delivered to Purchaser at Closing. Purchaser has not relied and will not rely on, and Seller is not and shall not be liable for or bound by, any express or implied warranties, guaranties, statements, representations or information pertaining to the Property or relating thereto made available or furnished by Seller, the managers of the Property or any real estate broker or agent representing or purporting to represent Seller, to whomever made or given, directly or indirectly, orally or in writing, unless specifically set forth in this Agreement or in any document executed by Seller and delivered to Purchaser at Closing. Purchaser acknowledges and agrees that the Purchase Price reflects and takes into account that the Property is being sold “AS IS, WHERE IS, WITH ALL FAULTS.” Purchaser represents to Seller that Purchaser has conducted such investigations of the Property, including, without limitation, the physical and environmental conditions thereof, as Purchaser deems necessary or desirable to satisfy itself as to the condition of the Property and the existence or nonexistence or curative action to be taken with respect to any hazardous or toxic substances on or discharged from the Property, and will rely solely upon the same and not upon any information provided by or on behalf of Seller or its agents or employees with respect thereto, other than such representations and warranties of Seller as are expressly set forth herein or in any document executed by Seller and delivered to Purchaser at Closing. Upon Closing, Purchaser shall assume the risk that adverse matters, including but not limited to construction defects and adverse physical and environmental conditions, may not have been revealed by Purchaser’s investigations, and except with respect to matters which by the express terms of this Agreement or any document executed by Seller and delivered to Purchaser at Closing survive Closing and except for any claims arising out of the fraudulent actions of Seller, Purchaser, upon Closing, shall be deemed to have waived, relinquished and released Seller (and Seller’s officers, directors, shareholders, direct and indirect members, employees and agents) from and against any and all claims, demands, causes of action (including causes of action in tort), losses, damages, liabilities, costs and expenses (including attorneys’ fees) of any and every kind or character, known or unknown, which Purchaser might have asserted or alleged against Seller (and Seller’s officers, directors, shareholders, direct and indirect members, employees and agents) at any time by reason of or arising out of any latent or

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patent construction defects or physical conditions, violations or any applicable laws and any and all other facts, omissions, events, circumstances or matters regarding the Property.

Section 2.7. Environmental Waiver and Release . Purchaser and each of its members, directors, officers, employees, controlling persons, representatives, agents, successors and assigns waive and release Seller, the Company and their respective officers, directors, shareholders, direct and indirect members, employees and agents (collectively, the “ Released Parties ”) from any and all losses or claims of Purchaser that (i) arise under any environmental law with respect to the Property or (ii) arise from or relate to an actual, threatened or suspected presence or release of materials of environmental concern at, on, under or from the Property no matter when the same may have occurred.

Section 2.8. Survival . The provisions of Sections 2.3, 2.4, 2.5, 2.6 and 2.7 and this Section 2.8 shall survive the Closing or any termination of this Agreement.

ARTICLE III.

REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 3.1. Representations and Warranties of Seller . Notwithstanding anything to the contrary herein, the representations and warranties made by Seller in this Agreement and in any document executed by Seller and delivered to Purchaser at Closing shall be deemed modified to the extent necessary to incorporate any matter disclosed in the Seller Diligence Deliveries. Seller hereby makes the following representations and warranties to Purchaser as of the Effective Date, which representations and warranties shall be deemed to have been made again by Seller as of the Closing Date, subject to the preceding sentence and to Section 4.6(c):

(a) Organization and Authority . Seller has been duly organized and is in good standing under the laws of the State of Delaware. The Company has been duly organized and is in good standing under the laws of the State of Delaware and is qualified to do business in the State of Kentucky. Seller has the full right and authority to enter into this Agreement and to consummate or cause to be consummated the transaction contemplated by this Agreement. The person signing this Agreement on behalf of Seller is authorized to do so. This Agreement constitutes a legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting the enforcement of creditors’ rights and general equitable principles.

(b) Non-Contravention . The execution and delivery of this Agreement by Seller and the consummation by Seller of the transactions contemplated hereby will not (i) to Seller’s knowledge, violate any judgment, order, injunction, decree, regulation or ruling of any court or governmental entity, (ii) conflict with, result in a breach of, or constitute a default under the organizational documents of Seller or the Company or (iii) conflict with, result in a breach of, or

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constitute a default under any note or other evidence of indebtedness, any mortgage, deed of trust or indenture, or any other material agreement or instrument to which Seller or the Company is a party or by which Seller or the Company may be bound in any manner that would individually or in the aggregate interfere with the consummation of the transaction contemplated by this Agreement or have a material adverse effect on the Company or the Property.

(c) Consents . No consent, waiver, approval or authorization is required from any person or entity (that has not already been obtained) in connection with the execution and delivery of this Agreement by Seller or the performance by Seller of the transactions contemplated hereby.

(d) No Bankruptcy . No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or, to Seller’s knowledge, threatened against Seller or the Company, nor are any such proceedings contemplated by Seller or the Company. Neither Seller nor the Company has made a general assignment for the benefit of creditors, filed any voluntary petition in bankruptcy or admitted in writing its inability to pay its debts as they come due, and Seller has received no written notice of and has no knowledge of the filing of any involuntary petition in bankruptcy by Seller’s creditors or the Company’s creditors or the appointment of a receiver to take possession of all or substantially all of Seller’s assets or the Company’s assets.

(e) Interests . Except for the rights of Purchaser created by this Agreement, Seller owns the Interests free and clear of all liens, claims, encumbrances or other security arrangements or obligations to other persons, of whatever kind or character, and Seller has the unrestricted right to sell, transfer and assign the Interests to Purchaser as provided in this Agreement. Other than this Agreement, the Interests are not subject to any outstanding agreement(s) of sale or options, rights of first refusal (including such rights under Seller’s or the Company’s organizational documents) or other rights of purchase to which Seller or the Company is a party. Other than this Agreement, there are no outstanding (i) options, warrants or other rights to purchase any membership interests in the Company, (ii) securities convertible into or exchangeable for membership interests in the Company or (iii) commitments of any kind for the issuance of additional membership interests in the Company. There are no certificates evidencing the Interests. The Interests have been duly and validly issued and are fully paid.

(f) Registration . The Interests to be purchased hereby have not been registered under the Securities Act of 1933, as amended (the “ Securities Act ”), or any applicable state securities laws. The Interests are being offered and sold in reliance upon exemptions contained in the Securities Act and in the rules and regulations thereunder, and in reliance upon exemptions from applicable state securities laws.

(g) Pending Actions . To Seller’s knowledge, there is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Seller or the Company which, if adversely determined, could individually or in the aggregate materially interfere with the consummation of the transaction contemplated by this Agreement.

(h) Non-Foreign Entity . Seller is not a “foreign person” within the meaning of Section 1445(f) of the Internal Revenue Code of 1986, as amended.

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(i) OFAC . Neither Seller nor, to Seller’s knowledge, any of its respective partners, members, shareholders or other equity owners, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of OFAC (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism).

(j) ERISA . Seller is not a “benefit plan investor” within the meaning of and subject to the Employee Retirement Income Security Act of 1974, as amended.

(k) Leases and Rent Rolls . The Company is the landlord or lessor under the Leases. To Seller’s knowledge, the information contained in the Rent Roll for the Property attached hereto as Exhibit C and made a part hereof, is true, correct and complete in all material respects as of the date thereof. There are no other leases or occupancy agreements affecting the Property except as set forth in the Rent Rolls. To Seller’s knowledge, Seller has made available to Purchaser copies of all Leases that are true, correct and complete in all material respects. To Seller’s knowledge, each Lease referenced on the Rent Roll is on Seller’s standard form lease for the Property and, except as specifically set forth on the Rent Roll, are for a term not longer than thirteen months. None of the Leases and none of the rents or other amounts payable thereunder have been assigned, pledged or encumbered by Seller or the Company except for any assignments, pledges or encumbrances which will be released at Closing.

(l) Contracts . To Seller’s knowledge, Seller has made available to Purchaser true, correct and complete copies of all Contracts. Neither the Company, nor to the knowledge of Seller, any other party to any Contract is in default thereunder.

(m) Condemnation . Seller has received no written notice of and has no knowledge of any pending or threatened condemnation proceedings relating to the Property.

(n) Title . There are no outstanding agreements, options, rights of first refusal or rights of first offer with respect to the purchase and sale of the Property other than this Agreement.

(o) Lease Commissions . A complete and correct list of all brokerage and leasing agreements affecting the Property, the Leases and any expansion or renewals thereof is set forth on Schedule 3.1(o) hereto (the “ Brokerage Agreements ”). Prior to the Closing, Seller shall, or shall cause the Company to pay all leasing commissions, whether or not then due, with respect to the Leases, to the effect that as of the date of Closing there shall be no commission or compensation payable under the Brokerage Agreements with respect to the Leases, whether or not then due. Purchaser shall have no obligation to pay any commission or other compensation under any Brokerage Agreement with respect to the expansion or renewal of any Lease.

(p) Permits and Approvals . To Seller’s knowledge, all required certificates of occupancy for the Property and for separately demised spaces at the Property, and all other licenses, permits, authorizations and approvals necessary for the operation of the Property have been validly issued and are in good standing and shall remain so upon completion of Closing. All charges and fees for such certificates, permits and approvals have been paid in full.

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(q) Compliance with Laws . To Seller’s knowledge, Seller has not received written notice from the applicable governmental authorities that the Property is in violation of any applicable statutes, laws, rules, regulations or ordinances.

(r) Condition of Property . To Seller’s knowledge, Seller has not received written notice from any third party that there are any material defects in the foundation, structural systems or roof or any material defects in the electrical, plumbing, heating, ventilating or air conditioning systems included within the Property, in each case that would reasonably be expected to cost more than $50,000 to repair.

(s) Personal Property . To Seller’s knowledge, all personal property necessary or incidental to the Company’s ownership or operation of the Property is owned by the Company free and clear of all liens and security interests other than those to be satisfied by Seller at Closing, is located in or on the Property. If any item of personal property is leased by the Company, Seller has delivered a complete and correct copy of the applicable equipment lease to Purchaser and the Company is not in default under such equipment lease.

(t) Employees . The Company has no employees.

(u) Assessments and Notices . To Seller’s knowledge, no assessments for public improvements have been made against the Property which remain unpaid in whole or in part. Neither Seller nor the Company has knowledge of any public improvements in the nature of off site improvements, or otherwise, which have been ordered to be made and/or which have not heretofore been assessed, which would result in the imposition of an assessment against the Property. No written notices from any governmental or other public authority with respect to the Property have been served on Seller or the Company, including, without limitation, notices of increases in tax assessments or notices relating to violations of zoning, building or safety or fire ordinances which remain uncorrected.

(v) Operating Statements, etc . The operating statements (including detailed schedules of receipts, operating expenses, real estate taxes and other amounts payable in connection with the ownership and operation of the Property), delivered by or on behalf of Seller to Purchaser in connection with this Agreement are the operating statements relied upon by Seller in its current business practices.

(w) Covenants and Restrictions . To Seller’s knowledge, neither Seller nor the Company has received written notice of any default or breach existing under any of the covenants, conditions, restrictions or easements, if any, affecting or all or any portion of the Property.

(x) Organizational Documents . True, correct and complete copies of the Company’s organizational documents, listed on Schedule 3.1(x) (the “ Organizational Documents ”) have been made available to Purchaser. As of the date hereof, the Organizational Documents have not been amended or modified (except as set forth on Schedule 3.1(x) ).

(y) Company . The Company (i) is, and to Seller’s knowledge, always has been, duly formed, validly existing, and in good standing in the state of its formation and in all other jurisdictions where it is qualified to do business, (ii) is not now, nor has ever been, party to any

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lawsuit, arbitration, summons, or legal proceeding that is still pending or that resulted in a judgment against it that has not been paid in full, and there are no liens of any nature against the Company except for taxes not yet due, (iii) to Seller’s knowledge, is not involved in any dispute with any taxing authority, (iv) has paid all taxes which it owes, (v) has never owned any real property other than the Property and personal property necessary or incidental to its ownership or operation of the Property and has never engaged in any business other than the ownership and operation of the Property and activities incidental thereto, (vi) if the Company has amended or restated its organizational documents, the Company has amended or restated its organizational documents in accordance with, and as was permitted by, the relevant provisions of the applicable organizational documents prior to its amendment or restatement, (vii) to Seller’s knowledge, is in compliance with all laws, regulations, and orders applicable to it in all material respects.

(z) Separateness . Since its date of formation, the Company (i) has not entered into any contract or agreement with any of its affiliates, constituents, or owners, or any guarantors of any of its obligations (each an “Affiliate”) or any person or entity in control of any Affiliate, under the same common control as any Affiliate, or under the control of any Affiliate (each a “Related Affiliate Party”) except upon terms and conditions that are commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party, (ii) has paid all of its debts and liabilities from its assets, (iii) has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence, (iv) has maintained all of its books, records, financial statements and bank accounts separate from those of any other person or entity, (v) has not had its assets listed as assets on the financial statement of any other person or entity, (vi) has filed all tax returns required to be filed by the Company and is not part of a consolidated group for U.S. federal income tax purposes or been included in a consolidated U.S. federal income tax return with any other person or entity, (vii) has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other person or entity (including any Affiliate or other Related Affiliate Party), (viii) has corrected any known misunderstanding regarding its status as a separate entity, (ix) has conducted all of its business and held all of its assets in its own name, (x) has not identified itself or any of its Affiliates as a division or part of the other, (xi) has maintained and utilized separate stationery, invoices and checks bearing its own name, (xii) has not commingled its assets with those of any other person or entity and has held all of its assets in its own name, (xiii) has not guaranteed or become obligated for the debts of any other Person, (xiv) has not held itself out as being responsible for the debts or obligations of any other person or entity, (xv) has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Affiliate Party, (xvi) has not pledged its assets to secure the obligations of any other person or entity and no such pledge remains outstanding except in connection with the Loan, (xvii) has maintained adequate capital in light of its contemplated business operations, (xviii) has not owned any subsidiary or any equity interest in any other entity, (xix) has not incurred any indebtedness that is still outstanding other than indebtedness that will be discharged at Closing and trade payables in the ordinary course, and (xx) has not had any of its obligations guaranteed by an Affiliate or other Related Affiliate Party, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the acquisition).

References to the “knowledge” of Seller refer only to the current actual knowledge of David W. Snyder and Paul Priebe without any duty of inquiry or investigation and shall not be

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construed, by imputation or otherwise, to refer to the knowledge of Seller or any affiliate of Seller, to any property manager or to any other officer, agent, manager, representative or employee of Seller or any affiliate thereof. Seller represents and warrants that David W. Snyder and Paul Priebe are the representatives of Seller that have primary responsibility to oversee the Company’s management of the Property and are the representatives of Seller who are most likely to have knowledge at the Seller level regarding the subject matter of the representations and warranties regarding the Property set forth in Section 3.1 above.

Section 3.2. Seller’s Covenants .

(a) Maintenance . From and after the Effective Date and until the Closing Date or any earlier termination of this Agreement (the “ Contract Period ”), Seller shall cause the Company to keep and maintain the Property substantially in its condition as of the Effective Date in accordance with Seller’s current business practices, excepting ordinary wear and tear and any damage by casualty or condemnation.

(b) Insurance . During the Contract Period, Seller will cause the Company to keep in full force and effect, and pay all premiums on, all casualty and liability insurance policies covering the Property in the ordinary course of business.

(c) Leases . During the Contract Period, Seller shall have the right to cause the Company to enter into new Leases or amend, modify, renew, extend or terminate any existing Lease in the ordinary course of business, on market terms consistent with Seller’s current business practices, including, without limitation, terminating any Lease by reason of Tenant’s default thereunder (collectively, “ Leasing Activity ”), and Seller shall provide Purchaser with prompt notice of any such Leasing Activity; provided , however , that from and after the Expiration of the Due Diligence Period, neither Seller nor the Company shall engage in any such Leasing Activity without the prior written consent of Purchaser, which consent Purchaser shall not unreasonably withhold, delay or condition. Notwithstanding the foregoing, the removal of any Tenant in accordance with Seller’s current business practices, whether by summary proceedings or otherwise, prior to the Closing Date shall not give rise to any claim on the part of Purchaser. Further, Purchaser agrees that it shall not have a claim by reason of the fact that any Tenant now or hereafter in possession of part of the Property may be a holdover tenant or in default under its applicable Lease on the Closing Date.

(d) Contracts . During the Contract Period, Seller shall not cause the Company to enter into new Contracts or amend, modify, renew, extend or terminate any existing Contract (other than with respect to Contracts that shall expire or be terminated without penalty on or prior to the Closing Date, or Contracts that may be terminated without penalty on 30 days’ notice or less) without the prior written consent of Purchaser, which consent Purchaser shall not unreasonably withhold, condition or delay.

(e) Rent Ready . During the Contract Period, Seller shall cause all vacant apartment units to be in “Rent Ready Condition”, other than (i) such apartments which become vacant less than seven (7) days prior to Closing and (ii) such apartments with respect to which Seller elects instead to provide Purchaser with the Purchase Price credit set forth in Section 4.5(g). As used

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herein, “ Rent Ready Condition ” shall mean “made ready” and suitable for occupancy in accordance with the Company’s current standards.

(f) Delinquency Report . Seller shall provide Purchaser with a delinquency report on a monthly basis until Closing, listing all delinquent tenants by amount and time delinquent.

(g) Material Changes . Seller shall promptly notify Purchaser in writing if Seller receives written notice from any third party of any event or circumstance which would be reasonably likely to have a material effect on the Property in excess of $10,000 or on Seller’s ability to execute or perform its obligations under this Agreement in all material respects.

Section 3.3. Representations and Warranties of Purchaser . Purchaser hereby makes the following representations and warranties to Seller as of the Effective Date, which representations and warranties shall be deemed to have been made again by Purchaser as of the Closing Date, subject to Section 4.7(c):

(a) Organization and Authority . Purchaser has been duly organized and is in good standing under the laws of the state of its formation. Purchaser has the full right and authority to enter into this Agreement and to consummate or cause to be consummated the transaction contemplated by this Agreement. The person signing this Agreement on behalf of Purchaser is authorized to do so. This Agreement constitutes a legal, valid and binding obligation of Purchaser, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting the enforcement of creditors’ rights and general equitable principles.

(b) Non-Contravention . The execution and delivery of this Agreement by Purchaser and the consummation by Purchaser of the transactions contemplated hereby will not (i) to Purchaser’s knowledge, violate any judgment, order, injunction, decree, regulation or ruling of any court or governmental entity, (ii) conflict with, result in a breach of, or constitute a default under the organizational documents of Purchaser or (iii) conflict with, result in a breach of, or constitute a default under the organizational documents of Purchaser, any note or other evidence of indebtedness, any mortgage, deed of trust or indenture, or any other material agreement or instrument to which Purchaser is a party or by which Purchaser may be bound in any manner that would individually or in the aggregate interfere with the consummation of the transaction contemplated by this Agreement.

(c) Consents . No consent, waiver, approval or authorization is required from any person or entity (that has not already been obtained) in connection with the execution and delivery of this Agreement by Purchaser or the performance by Purchaser of the transactions contemplated hereby.

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debts as they come due, and Purchaser has received no written notice of and has no knowledge of the filing of any involuntary petition in bankruptcy by Purchaser’s creditors or the appointment of a receiver to take possession of all or substantially all of Purchaser’s assets.

(e) Pending Actions . To Purchaser’s knowledge, there is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Purchaser which, if adversely determined, could individually or in the aggregate materially interfere with the consummation of the transaction contemplated by this Agreement.

(f) OFAC . Neither Purchaser nor, to Purchaser’s knowledge, any of its respective partners, members, shareholders or other equity owners, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of OFAC (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism).

Section 3.4. Purchaser’s Covenants . During the Contract Period, Purchaser shall observe all of the covenants and conditions applicable to Purchaser hereunder.

Section 3.5. No Brokers . Seller and Purchaser each represent to the other that it has had no dealings, negotiations or consultations with any broker, representative, employee, agent or other intermediary in connection with the sale of the Property. Seller and Purchaser agree that each will indemnify, defend and hold the other free and harmless from any claims arising from a breach of the foregoing representations. This mutual indemnity shall survive Closing and any termination of this Agreement.

Section 3.6. Survival; Limitation on Liability of Seller Parties .

(a) The representations and warranties made herein by Seller shall survive the Closing for a period of nine months following the Closing Date, provided that such expiration shall not affect the liability or indemnification obligations of Seller with respect to claims made by Purchaser in writing (a “ Claim Notice ”) delivered prior to the date of such expiration and, if not resolved, Purchaser has filed suit in connection with the matter set forth in such Claim Notice within six months after Seller’s receipt of the Claim Notice.

(b) Purchaser shall not have any right to bring any action against the Seller Parties as a result of any breach or inaccuracy of the representations and warranties made herein by the Seller Parties (a “ Breach ”) unless and until the aggregate amount of all liability and losses arising out of any such Breach directly results in a diminution in the value of the Interests in an amount greater than $100,000.00, and the aggregate liability of the Seller Parties arising in connection with all Breaches shall not in any event exceed $400,000.00 of the Purchase Price (the “ Liability Cap ”). None of the directors, officers, employees, shareholders, direct or indirect

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members, managers, beneficial owners, partners, affiliates, agents, representatives or advisors of any of the Seller Parties shall be liable under this Agreement, and Purchaser shall look solely to the assets of the Seller Parties, subject to the Liability Cap, for the payment of any claim or the performance of any obligation of any Seller Party hereunder. Seller shall hold in the form of cash or cash equivalents an amount equal to $400,000.00 until the date that is nine months following the Closing Date (or, if Purchaser has timely provided a Claim Notice within such nine-month period, until the date that any claim in such Claim Notice has been finally resolved by a court of competent jurisdiction). The provisions of this Section 3.6 shall survive the Closing or any termination of this Agreement.

ARTICLE IV.

CLOSING

Section 4.1. Closing Date . The consummation of the transaction contemplated by this Agreement (the “ Closing ”) will occur on the date that is 15 days after the Expiration of the Due Diligence Period or such earlier date as the parties shall mutually agree in writing (the “ Closing Date ”); provided , however , that Seller may elect to extend the Closing Date for not more than 30 days in connection with Seller’s selection of an alternate title insurance company pursuant to Section 2.2(c). At the Closing, Seller and Purchaser shall perform the obligations set forth in Sections 4.5 and 4.6, respectively, the performance of which obligations shall be concurrent conditions. The Closing shall be consummated through an escrow administered by Escrow Agent and the Purchase Price and all documents required to be delivered at Closing shall be deposited with Escrow Agent unless otherwise mutually agreed by Seller and Purchaser. If necessary, the parties, including Escrow Agent, will enter into supplementary escrow instructions regarding the delivery of funds and documents for the Closing. Time shall be of the essence with respect to each and every obligation of Purchaser under this Agreement including, without limitation, the obligation of Purchaser to consummate the Closing on the Closing Date.

Section 4.2. Closing Costs . Seller shall pay (a) the fees of any counsel representing Seller, (b) any fees incurred in connection with prepaying the existing indebtedness on the Property, (c) any costs and expenses incurred in connection with removing any Monetary Liens, (d) one half of the escrow fee, if any, charged by the Escrow Agent, (e) the cost of any endorsements to the Title Policy necessary solely for the removal of Monetary Liens and (f) the cost of the Survey. Purchaser shall pay (i) the fees of any counsel representing Purchaser; (ii) one half of the escrow fee, if any, charged by the Escrow Agent; (iii) recording fees for any documents to be recorded (other than Monetary Liens); and (iv) the cost of the Title Policy and any endorsements attached thereto at the request of Purchaser (other than in connection with a Monetary Lien). All costs and expenses incident to this transaction and the Closing and not specifically described above shall be paid by the party incurring the same.

Section 4.3. Conditions Precedent to the Obligations of Seller . The obligation of Seller to consummate the transaction contemplated

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hereunder shall be subject to the fulfillment on or before the Closing Date of each of the following conditions, any or all of which may be waived by Seller in its sole discretion:

(a) Escrow Agent shall have received the Purchase Price, subject to prorations and adjustments as provided herein, with unconditional instructions to disburse same in accordance with the agreed-upon settlement statement simultaneously with Seller’s authorization to release the documents for delivery to Purchaser, all pursuant to and payable in the manner provided for in this Agreement;

(b) Purchaser shall have delivered to Seller all of the items required to be delivered to Seller pursuant to the terms of this Agreement, including but not limited to, those provided for in Section 4.7;

(c) all of the representations and warranties of Purchaser contained in this Agreement shall be true and correct in all material respects as of the Closing Date (with appropriate modifications permitted under this Agreement);

(d) Purchaser shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Purchaser as of the Closing Date; and

(e) the closing date under the Related Agreements shall be the same as the Closing Date hereunder, and the closing under the Related Agreements shall occur simultaneously with the Closing hereunder.

Section 4.4. Conditions Precedent to the Obligations of Purchaser . The obligation of Purchaser to consummate the transaction contemplated hereunder shall be subject to the fulfillment on or before the Closing Date of each of the following conditions, any or all of which may be waived by Purchaser in its sole discretion:

(a) Seller shall have delivered to Purchaser all of the items required to be delivered to Purchaser pursuant to the terms of this Agreement, including but not limited to, the items provided for in Section 4.6;

(b) all of the representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date (with appropriate modifications permitted under this Agreement);

(c) Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Seller as of the Closing Date;

(d) Seller shall have paid off or caused to be removed any Monetary Liens or arranged for the payoff or removal of the same concurrent with the Closing pursuant to Section 4.8;

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(e) the Title Company shall be irrevocably committed, upon payment of the applicable Title Policy premium, to issue to Purchaser, at Purchaser’s expense, the Title Policy including an ALTA 15-06 endorsement (non-imputation – full equity transfer); and

(f) the closing date under the Related Agreements shall be the same as the Closing Date hereunder, and the closing under the Related Agreements shall occur simultaneously with the Closing hereunder, unless any Related Agreement is terminated pursuant to the terms thereof as the result of Major Damage.

Notwithstanding anything to the contrary in this Agreement, in the event the sale of the Property as contemplated hereunder is not consummated solely due to the failure of the Title Company to be irrevocably committed, upon payment of the applicable Title Policy premium, to issue an ALTA 15-06 endorsement to the Title Policy, and Purchaser has notified Seller in writing of such circumstance and is not in default under this Agreement, Purchaser shall be entitled, as its sole remedy, to receive the return of the Deposit, together with reimbursement from Seller for all of Purchaser’s costs and expenses incurred in connection with this Agreement in an amount not to exceed $50,000, in which event this Agreement shall be terminated and neither Seller nor Purchaser shall have any obligation under this Agreement except obligations which expressly survive the termination of this Agreement.

Section 4.5. Credits and Prorations .

(a) Generally . Subject to the terms and provisions of this Section 4.5, the following items, without duplication, will be apportioned between Seller and Purchaser with respect to the Property as of 11:59 p.m. Eastern time on the day immediately prior to the Closing Date, and the net amount thereof will either be (x) added to the Purchase Price that is due to Seller at Closing or (y) credited by Seller against the Purchase Price at Closing: (i) real property taxes and assessments, (ii) water rates and charges; (iii) sewer taxes and rents; (iv) prepaid license and permit fees to the extent such licenses and permits are being transferred to Purchaser hereunder, (v) amounts payable or receivable by Seller or its affiliates under any Contracts (including amounts pre-paid to Seller and not subject to refund under any Contract which is not terminable upon thirty days’ notice), (vi) statutory representation fees for the Company and (vii) all other items that reasonably require apportionment in accordance with local custom and practice to effectuate the transaction contemplated hereunder. Seller and Purchaser shall reasonably cooperate to provide such apportionment information to the Title Company not later than five Business Days before Closing, and the Title Company will prepare a closing statement (the “ Closing Statement ”) reflecting the apportionments and credits required under this Agreement.

(b) Governmental Charges . If the Closing Date occurs before the real property taxes, water rates and charges, or sewer taxes and rents are finally fixed for the current fiscal year in respect of the Property, then the apportionments thereof made at the Closing shall be upon 105% of the basis of the tax, water, or sewer rates for the immediately preceding year applied to the latest assessed valuation, but after the real property taxes, water rates and charges, or sewer taxes and rents (as the case may be) are finally fixed for the current fiscal year, Seller and Purchaser shall make a recalculation of the apportionment thereof, and Seller or Purchaser, as the case may

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be, shall make an appropriate payment to the other party based on such recalculation within 30 days after the parties agree on the recalculation.

(c) Utilities . If there are any meters measuring water consumption, electric or other utility costs at the Property, the unfixed rates and charges and sewer taxes and rents, if any, will be apportioned based upon the last meter readings. Seller will at its election either receive a credit at Closing for all deposits posted with any utility companies which shall then inure to the benefit of Purchaser or will arrange for the return of such deposits to Seller. In either case, it will be Purchaser’s responsibility to make arrangements with such utility companies regarding any deposit requirements for continued utility service to the Property.

(d) Fuel Oil . Fuel oil, if any, located at the Property on the Closing Date will be adjusted at the price in effect at such times as determined in writing by the fuel company then supplying fuel to the Property.

(e) Assessments . If, on the Closing Date, the Property, or any part thereof, is affected by any real property tax assessments which are currently due and payable, then Seller shall pay such assessments; provided , however , that if such assessments are payable in installments, then Seller shall pay installments due prior to the Closing Date, and the next installment shall be apportioned as of the Closing Date, and Purchaser shall be responsible for all such installments thereafter.

(f) Security Deposits, Rents and Charges Under Leases and Other Income Sources . Purchaser will receive a credit at Closing in an amount equal to all Security Deposits being held by Seller as of Closing (or applied or retained by Seller other than in the ordinary course of business). Purchaser will receive a credit at Closing in an amount equal to all rents and other charges collected by Seller prior to Closing for the number of days in the month of Closing remaining after the Closing and for any other period following Closing, including, without limitation, any prepaid rents. Seller hereby reserves the right to institute legal proceedings, without, however, any claim for eviction, after the Closing against any Tenant to collect rent and charge collections with respect to the Property due to Seller for rents and charges in arrears as of the Closing Date. Purchaser shall use reasonable efforts to collect any such rents and charges in arrears of the Closing Date, and any such amounts that Purchaser collects on or after the Closing Date shall be applied first to the month in which the Closing occurs, and then to rent and charges due but unpaid in reverse chronological order. Purchaser in the good faith exercise of its business judgment shall have the right to forgive or compromise any past due rents as part of a settlement with a delinquent tenant, and Seller agrees not to bring suit against any delinquent tenant for sums payable under the Leases. The foregoing covenant not to sue shall not apply to any tenant who has vacated its space (unless, if in connection with the termination of such tenant’s lease, Purchaser has forgiven or compromised past due rent).

(g) Rent Ready . For any apartment unit that is vacated on or before the date that is seven (7) days prior to Closing, Seller shall, at Seller’s election, either (i) credit Purchaser $500.00 for the cost and expenses to put the unit in Rent Ready Condition or (ii) cause such apartment unit to be in Rent Ready Condition as of the date of Closing.

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(h) Final Closing Statement . Seller and Purchaser will adjust any apportionments made under this Section 4.5 after the Closing to account for errors or incorrect estimates made as of the Closing Date (it being agreed that the parties’ agreement to make such adjustments will survive the Closing for a period of six months). Within six months following the Closing Date, Purchaser or its agent will prepare, and Seller will review and approve (which approval shall not be unreasonably withheld and which shall be deemed to have been given unless Seller gives its specific objections thereto in writing within 10 Business Days after receipt thereof) a final closing statement (the “ Final Closing Statement ”) setting forth the final determination which will show the net amount due either to Seller or to Purchaser as the result of the adjustments and prorations provided for herein, and such net due amount, if any, will be due to Seller or Purchaser, as applicable. The net amount due Seller or Purchaser, if any, by reason of any adjustments as shown in the Final Closing Statement (including any open items), shall be paid in cash by wire transfer by the party obligated therefor within 10 Business Days following that party’s receipt of the approved Final Closing Statement. Purchaser and Seller shall provide one another and their respective representatives with reasonable backup documentation evidencing the amounts set forth on the Final Closing Statement. The provisions of this Section 4.5 shall survive the Closing.

Section 4.6. Seller’s Obligations at Closing . At Closing, Seller shall:

(a) deliver to Purchaser a duly executed Assignment and Assumption of Membership Interests (the “ Assignment and Assumption of Membership Interests ”) in the form attached hereto as Exhibit D , conveying the 100% of the Interests to Purchaser;

(b) deliver to Purchaser, not later than five Business Days before the Closing Date, updated Rent Rolls dated not later than 10 Business Days before the Closing Date and on the Closing Date, updated Rent Rolls dated as of the Closing Date;

(c) in the event that any representation or warranty of Seller set forth in Section 3.1 needs to be modified due to changes since the Effective Date, deliver to Purchaser a certificate (the “ Seller Closing Certificate ”), dated as of the Closing Date and duly executed by Seller, identifying any representation or warranty that is not, or no longer is, true and correct and explaining the state of facts giving rise to such change. In no event shall Seller be liable to Purchaser for, or be deemed to be in default hereunder by reason of, any breach of representation or warranty that results from any change that (i) occurs between the Effective Date and the Closing Date and (ii) is expressly permitted under the terms of this Agreement; provided , however , that the occurrence of a change that is not permitted hereunder shall constitute the non-fulfillment of the condition set forth in Section 4.4(b). If, despite changes or other matters described in the Seller Closing Certificate, the Closing occurs, Seller’s representations and warranties set forth in this Agreement shall be deemed to have been modified by all statements made in the Seller Closing Certificate;

(d) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Seller;

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(e) deliver to the Title Company an owner’s affidavit duly executed by the Company, in customary form reasonably acceptable to the Title Company;

(f) deliver to Purchaser a certificate in the form attached hereto as Exhibit E duly executed by Seller and stating that Seller is not a “foreign person” as defined in the Federal Foreign Investment in Real Property Tax Act of 1980;

(g) terminate or cause the Company to terminate, effective on or before the Closing Date, all Brokerage Agreements and property management agreements, as well as any Contracts which Purchaser elects, on or prior to the Expiration of the Due Diligence Period, not to assume and deliver to Purchaser evidence of each such termination; provided , however , that if any termination fees or other penalties are incurred by the Company as a result of the termination of such Contracts, the amount of any such fees or penalties shall be credited to Seller at Closing or otherwise paid by Purchaser;

(h) deliver an executed counterpart to the Closing Statement;

(i) make available to Purchaser, to the extent not already provided, the Leases and Contracts, together with such leasing and property files and records located in the property manager’s office for the Property which relate to the continued operation, leasing and maintenance of the Property, but excluding any documents of a confidential nature;

(j) deliver to Purchaser possession and occupancy of the Property (including all keys, lock combinations, and pass keys), subject to the Permitted Exceptions, rights of Tenants and terms of the Contracts;

(k) deliver a schedule of Security Deposits currently held by Seller on behalf of the Tenants; and

(l) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement.

Section 4.7. Purchaser’s Obligations at Closing . At Closing, Purchaser shall:

(a) pay to Seller, in immediately available federal funds transferred by wire pursuant to Section 1.3, the full amount of the Purchase Price, subject to prorations and adjustments as provided herein;

(b) deliver to Seller an executed counterpart to the Assignment and Assumption of Membership Interests;

(c) in the event that any representation or warranty of Purchaser set forth in Section 3.2 needs to be modified due to changes since the Effective Date, deliver to Seller a certificate (the “ Purchaser Closing Certificate ”), dated as of the Closing Date and duly executed by Purchaser, identifying any representation or warranty that is not, or no longer is, true and correct and explaining the state of facts giving rise to such change. In no event shall Purchaser be liable

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to Seller for, or be deemed to be in default hereunder by reason of, any breach of representation or warranty that results from any change that (i) occurs between the Effective Date and the Closing Date and (ii) is expressly permitted under the terms of this Agreement; provided , however , that the occurrence of a change that is not permitted hereunder shall constitute the non-fulfillment of the condition set forth in Section 4.3(c). If, despite changes or other matters described in the Purchaser Closing Certificate, the Closing occurs, Purchaser’s representations and warranties set forth in this Agreement shall be deemed to have been modified by all statements made in the Purchaser Closing Certificate;

(d) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Purchaser;

(e) deliver an executed counterpart to the Closing Statement; and

(f) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement.

Section 4.8. Application of Purchase Price to Monetary Liens at Closing . To enable Seller to make the consummate the transactions contemplated hereunder, Seller may elect, at the Closing, to use the Purchase Price or any portion thereof to clear the title of the Property of any or all Monetary Liens.

ARTICLE V.

RISK OF LOSS

Section 5.1. Minor Damage . In the event of Property Damage that is not Major Damage, this Agreement shall remain in full force and effect provided that Seller shall assign to Purchaser all of Seller’s right, title and interest in and to any claims and proceeds Seller may have with respect to any property or casualty insurance policies or condemnation awards relating to the premises in question less any costs of collection or restoration with respect thereto incurred by Seller and the Purchase Price shall be reduced by an amount equal to the lesser of the deductible amount under Seller’s insurance policy or the cost of such repairs as reasonably determined by Purchaser and Seller. As of 12:01 a.m. Eastern time on the Closing Date, full risk of loss with respect to the Property shall pass to Purchaser.

Section 5.2. Major Damage .

(a) In the event of Property Damage constituting Major Damage, Purchaser may terminate this Agreement only by written notice to Seller. If Purchaser does not elect to terminate this Agreement within 10 Business Days after Seller sends Purchaser written notice of the occurrence of such Major Damage, then Purchaser shall be deemed to have elected to proceed with the purchase and sale of the Property, in which event Seller shall assign to Purchaser all of Seller’s right, title and interest in and to any claims and proceeds Seller may have with respect to any property or casualty insurance policies or condemnation awards relating

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to the Property and the Purchase Price shall be reduced by an amount equal to the lesser of the deductible amount under Seller’s insurance policy or the cost of such repairs as reasonably determined by Purchaser and Seller. If Purchaser timely elects to terminate this Agreement under this Section 5.2, neither party shall have any further rights or obligations hereunder (except for any indemnity obligations of either party and the provisions of this Agreement which expressly survive termination of this Agreement) and the Deposit shall be returned to Purchaser.

(b) Seller has the right to pursue payment of any awards or proceeds in connection with any such condemnation proceeding and/or the settlement or negotiation of any insurance claim. In the event this Agreement is not terminated as the result of such Major Damage pursuant to the terms hereof, Purchaser shall have the right to participate in the settlement or negotiation of claims for all awards or proceeds and/or participate in any proceedings related to a condemnation of the Property and, in connection therewith, Seller shall, and shall cause the Company to, promptly deliver to Purchaser upon request all material documents received by Seller in connection with the foregoing. In the event this Agreement is not terminated as the result of such Major Damage pursuant to the terms hereof, Seller shall not, and shall not allow the Company to, accept any award or enter into any settlement without first obtaining the prior written consent of Purchaser, not to be unreasonably withheld, conditioned or delayed.

ARTICLE VI.

DEFAULT AND REMEDIES

Section 6.1. Default by Seller; Purchaser’s Remedies . In the event the sale of the Property as contemplated hereunder is not consummated due to Seller’s default hereunder, and Purchaser has notified Seller in writing of such default and is not in default under this Agreement, Purchaser shall be entitled, as its sole remedy, either (i) to receive the return of the Deposit, together with reimbursement from Seller for all of Purchaser’s costs and expenses incurred in connection with this Agreement in an amount not to exceed $50,000, in which event this Agreement shall be terminated and neither Seller nor Purchaser shall have any obligation under the Agreement except the obligations which expressly survive the termination of this Agreement or (ii) to enforce specific performance of Seller’s obligation to convey title to the Property in accordance with this Agreement, it being understood and agreed that the remedy of specific performance shall not be available to enforce any other obligation of Seller hereunder; provided , however , if such Seller’s default (if curable) is cured within 10 Business Days after receipt of written notice thereof from Purchaser, Purchaser shall not be entitled to exercise the remedies in clauses (i) and (ii) above. Except as set forth above, Purchaser expressly waives its rights to seek damages of any kind in the event of Seller’s default hereunder. Purchaser shall be deemed to have elected to terminate this Agreement and receive a return of the Deposit and reimbursement of its expenses as provided above if Purchaser fails to file suit against Seller in a court having jurisdiction in the county in which the Property is located, on or before 30 days following the date upon which Closing was to have occurred.

Section 6.2. Default by Purchaser; Seller’s Remedies .

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(a) In the event the sale of the Property as contemplated hereunder is not consummated due to Purchaser’s default hereunder, and Purchaser’s default (if curable) is not cured within 10 Business Days after receipt of written notice from Seller, Seller shall be entitled, as its sole remedy, to terminate this Agreement and receive the Deposit as liquidated damages for the breach of this Agreement.

(b) THE PARTIES HERETO AGREE THAT SELLER’S ECONOMIC DETRIMENT RESULTING FROM THE REMOVAL OF THE PROPERTY FROM THE REAL ESTATE MARKET FOR AN EXTENDED PERIOD OF TIME AND ANY CARRYING AND OTHER COSTS INCURRED AFTER THE REMOVAL OF THE PROPERTY FROM THE REAL ESTATE MARKET ARE IMPRACTICABLE OR EXTREMELY DIFFICULT TO ASCERTAIN. THE PARTIES HERETO AGREE THAT THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT WILL BE INCURRED BY SELLER IN THE EVENT THE CLOSING FAILS TO OCCUR DUE TO A DEFAULT OR BREACH OF THIS AGREEMENT BY PURCHASER. PURCHASER AGREES THAT IN THE EVENT THE CLOSING FAILS TO OCCUR DUE TO SUCH DEFAULT OR BREACH BY PURCHASER OF PURCHASER’S OBLIGATION TO PURCHASE THE PROPERTY, SELLER, AS ITS SOLE REMEDY, SHALL BE ENTITLED TO RECEIVE AND RETAIN THE DEPOSITS AS LIQUIDATED DAMAGES, WHICH SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY. THIS LIQUIDATED DAMAGES PROVISION ALSO SHALL NOT SERVE AS A LIMITATION ON THE AMOUNT OF ATTORNEYS’ FEES THAT SELLER MAY PURSUE OR COLLECT FROM PURCHASER IN THE EVENT SELLER INCURS ATTORNEYS’ FEES IN ATTEMPTING TO COLLECT OR RETAIN THE LIQUIDATED DAMAGES REFERRED TO HEREIN (AND SELLER IS THE PREVAILING PARTY IN SUCH DISPUTE IN ACCORDANCE WITH SECTION 7.15 BELOW).

Section 6.3. Indemnification Obligations . Notwithstanding anything in Sections 6.1 or 6.2 to the contrary, in no event shall the provisions of Sections 6.1 or 6.2 limit the damages recoverable by either party against the other due to the other party’s obligation to indemnify such party in accordance with this Agreement. This Section 6.3 shall survive the Closing or any termination of this Agreement.

Section 6.4. Limitation on Seller Parties’ Personal Liability . Purchaser agrees that it shall look solely to the Property and the Deposit, and not to any other assets of Seller, the Company or their respective directors, officers, employees, shareholders, direct or indirect members, managers, beneficial owners, partners, affiliates, agents, representatives or advisors or any of their assets to enforce Purchaser’s rights under this Agreement, and that none of the directors, officers, employees, shareholders, direct or indirect members, managers, beneficial owners, partners, affiliates, agents, representatives or advisors of Seller or the Company shall have any personal obligation or liability hereunder, and that Purchaser shall not seek to assert any claim or enforce any of Purchaser’s rights hereunder against any such parties. The provisions of this Section 6.4 shall survive the Closing or any termination of this Agreement.

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ARTICLE VII.

MISCELLANEOUS

Section 7.1. Confidentiality .

(a) Except as required by law, Purchaser and its representatives shall hold in strictest confidence all data and information obtained with respect to Seller or its business, whether obtained before or after the execution and delivery of this Agreement, except (i) such data and information that is or may be required to be disclosed by Purchaser under any law, rule, regulation, court order or other judicial process and (ii) such data and information that is or becomes generally available to the public other than as a result of disclosure in breach of this Agreement; provided , however , that Purchaser may disclose such data and information to the directors, trustees, advisors, employees, lenders, consultants, accountants and attorneys of Purchaser and its affiliates, provided that Purchaser instructs such persons to treat such data and information confidentially. In the event this Agreement is terminated or Purchaser fails to perform hereunder, Purchaser shall promptly return to Seller or destroy any statements, documents, schedules, exhibits or other written information obtained from Seller in connection with this Agreement or the transaction contemplated herein. In the event of a breach or threatened breach by Purchaser or its agents or representatives of this Section 7.1, Seller shall be entitled to an injunction restraining Purchaser or its agents or representatives from disclosing, in whole or in part, such confidential information. Nothing herein shall be construed as prohibiting Seller from pursuing any other available remedy at law or in equity for such breach or threatened breach, but in no event shall Purchaser be liable to Seller for punitive or consequential damages.

(b) Seller or Purchaser may release to the public information describing in general terms the sale contemplated hereunder, but all references to Seller or any direct or indirect owners of Seller or to the Purchase Price in any such release are subject to the prior written approval of Seller, which approval Seller may withhold in its sole discretion.

(c) Notwithstanding the terms of Section 7.1(a) or Section 7.1(b) to the contrary, Seller acknowledges that Purchaser is affiliated with publicly traded real estate investment trusts, namely Independence Realty Trust, Inc. (“ IRT ”) and RAIT Financial Trust (“ RAIT ”, and together with IRT, the “ REITs ”), and either of the REITs may determine in their reasonable discretion that the public disclosure of any information subject to Section 7.1 is necessary or advisable under applicable securities laws (including, without limitation, information regarding the terms of this Agreement, the Purchase Price, the Property and Seller) and Seller agrees that any such disclosure by the REITs, the Purchaser or their respective affiliates or representatives shall not be deemed a violation of the provisions of Section 7.1 and shall not be subject to the prior written approval of Seller (including, without limitation, any such disclosure made pursuant to the provisions of current, quarterly and annual report forms promulgated under applicable securities laws and in connection with any securities offerings by the REITs).

(d) The provisions of this Section 7.1 shall survive any termination of this Agreement or the Closing for a period of three (3) years.

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Section 7.2. Seller Confidentiality and Trading . Seller acknowledges that, through the course of the transaction contemplated hereunder, Seller may be provided by the Purchaser or its affiliates with information regarding Purchaser and Purchaser’s affiliates including, without limitation, the REITs (collectively, the “ Purchaser Parties ”). Except as required by law, Seller and its representatives shall hold in strictest confidence all data and information obtained with respect to Purchaser Parties or their respective businesses, whether obtained before or after the execution and delivery of this Agreement, except such information (i) that is or may be required to be disclosed by Seller under any law, rule, regulation, court order or other judicial process and (ii) that is or becomes generally available to the public other than as a result of disclosure in breach of this Agreement, (iii) becomes lawfully available to Seller on a non-confidential basis from a source other than a Purchaser Party or one of its agents or representatives, which is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to any Purchaser Party or any other party with respect to any portion of the information or (iv) was lawfully known to Seller on a non-confidential basis prior to its disclosure to Seller by a Purchaser Party or one of its agents or representatives; provided, however, that Seller may disclose such information to the employees and attorneys of Seller and its direct and indirect owners to the extent reasonably necessary in connection herewith, provided that Seller instructs such persons to treat such information confidentially. Seller acknowledges that it is aware, and that Seller has advised each recipient it has provided such information, that the securities laws of the United States prohibit any person who has material non-public information to purchase or sell securities of an issuer without the prior public dissemination of such information. Seller further agrees that it will not use such information to make an investment, or communicate such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities, in any manner inconsistent with the securities laws of the United States. The provisions of this Section 7.2 shall survive any termination of this Agreement or the Closing for a period of three (3) years.

Section 7.3. Record Access and Retention . Seller shall provide to Purchaser (at Purchaser’s sole cost and expense) copies of, or shall provide Purchaser reasonable access to, such factual information as may be reasonably requested by Purchaser, and in the possession or control of Seller, or its property manager or accountants, to enable Purchaser’s auditor to conduct an audit, in accordance with Rule 3-14 of Securities and Exchange Commission Regulation S-X, or as may be reasonably required by Purchaser or any affiliate of Purchaser to make any required filings with the Securities and Exchange Commission or other governmental authority, of the balance sheet and income statements of the Property for the year to date of the year in which Closing occurs plus the two immediately preceding calendar years. Seller’s obligation to maintain its records for use under this Section 7.3 shall be an ongoing condition to Closing for Purchaser’s benefit until Closing. Seller shall maintain its records for use under this Section 7.3 for a period of not less than two years after the Closing Date. The provisions of this Section shall survive Closing.

Section 7.4. Related Agreements . Seller and Purchaser acknowledge that, simultaneously with the execution of this Agreement, Seller and Purchaser are entering into the

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Related Agreements, and that Seller and Purchaser intend for the transactions contemplated by each of the Related Agreements to be consummated in tandem. Any termination by Seller or Purchaser under any of the Related Agreements (other than a termination in connection with a casualty or condemnation pursuant to the terms of such Related Agreement, which shall apply solely to the Related Agreement for the affected property) will be deemed to be a termination by such party of this Agreement. Any default by Seller or Purchaser under any of the Related Agreements will be deemed to be a default by such party under this Agreement.

Section 7.5. Assignment . Purchaser may not assign its rights under this Agreement without the prior written consent of Seller, which consent may be granted or denied in Seller’s sole discretion. Notwithstanding the foregoing, Purchaser may assign this Agreement to a wholly owned subsidiary or name a wholly owned nominee to take title to the Property without Seller’s consent. However, Purchaser shall promptly notify Seller of any such assignment. No assignment, whether with or without the consent of Seller, shall operate to release Purchaser from or alter Purchaser’s primary liability to perform its obligations under this Agreement.

Section 7.6. Notices . Any notice pursuant to this Agreement shall be given in writing by (i) personal delivery, (ii) reputable overnight delivery service with proof of delivery or (iii) electronic mail, sent to the intended addressee at the address set forth below, or to such other address or to the attention of such other person as the addressee shall have designated by written notice sent in accordance herewith, and shall be deemed to have been given upon receipt or refusal to accept delivery, or, in the case of an electronic mail transmission, as of the date of an electronic mail transmission provided that the confirmation of such transmission was received prior to 8:00 p.m. Eastern time and an original of such electronic mail transmission is also sent to the intended addressee by means described in clauses (i) or (ii) above. Unless changed in accordance with the preceding sentence, the addresses for notices given pursuant to this Agreement shall be as follows:


If to Seller:		Brookside CRA-B1, LLC
		c/o Continental Realty Advisors, Ltd.
		10579 W. Bradford Road, Suite 100
		Littleton, Colorado 80172
		Attn: David W. Snyder

with a copy to each of:		Hamil/Martin LLC
		140 East 19 ^th Avenue, Suite 600
		Denver, Colorado, 80203-1035
		Attn: Larry Hamil, Esq.

		Ropes & Gray LLP
		Prudential Tower
		800 Boylston Street
		Boston, Massachusetts 02199
		Attn: Marc D. Lazar, Esq.
		Telephone: (617) 951-7866

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	Email: marc.lazar@ropesgray.com

If to Purchaser:	Independence Realty Operating Partnership, LP
	c/o RAIT Financial Trust
	Cira Centre
	2929 Arch Street, 17 ^th Floor
	Philadelphia, PA 19104
	Attention:	Farrell Ender
	Email:	fender@irtreit.com

with a copy to:

	RAIT Financial Trust
	2929 Arch Street, 17 ^th Floor
	Philadelphia, PA 19104
	Attention:	Jamie Reyle, Esquire
	Facsimile:	215.405.2945
	Email:	jreyle@raitft.com

Section 7.7. Modifications . This Agreement cannot be changed orally, and no executory Agreement shall be effective to waive, change, modify or discharge it in whole or in part unless such executory Agreement is in writing and is signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought.

Section 7.8. Entire Agreement . This Agreement, including the exhibits and schedules hereto, contains the entire Agreement between the parties hereto pertaining to the subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the parties pertaining to such subject matter.

Section 7.9. Further Assurances . Each party agrees that it will execute and deliver such other documents and take such other action, whether prior or subsequent to Closing, as may be reasonably requested by the other party to consummate the transaction contemplated by this Agreement. The provisions of this Section 7.9 shall survive Closing or earlier termination of this Agreement.

Section 7.10. Counterparts . This Agreement may be executed in counterparts, all such executed counterparts shall constitute the same Agreement, and the signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart.

Section 7.11. Electronic or Facsimile Signatures . In order to expedite

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the transaction contemplated herein, electronic or facsimile signatures may be used in place of original signatures on this Agreement. Seller and Purchaser intend to be bound by the signatures on the electronic or facsimile document, are aware that the other party will rely on the electronic or facsimile signatures and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of signature.

Section 7.12. Severability . If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect; provided that the invalidity or unenforceability of such provision does not materially adversely affect the benefits accruing to any party hereunder.

Section 7.13. Applicable Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Kentucky without giving effect to any conflict of laws principles.

Section 7.14. No Third-Party Beneficiaries . The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller, the Company and Purchaser only and are not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing.

Section 7.15. No Recordation . This Agreement or a notice thereof or a lis pendens may not be recorded by Purchaser without the prior written consent of Seller, which consent may be withheld in Seller’s sole discretion. Notwithstanding any term or provision herein to the contrary, if Purchaser records this Agreement or a notice thereof or a lis pendens without the consent of Seller such action shall be a breach and default hereunder by Purchaser allowing Seller to immediately terminate this Agreement and retain the Deposit and thereafter this Agreement shall be null and void except for any provisions which by their terms expressly survive a termination of this Agreement. The provisions of this Section 7.14 shall survive the Closing or any termination of this Agreement.

Section 7.16. Prevailing Party . If either party commences legal proceedings for any relief against the other party arising out of this Agreement or any documents, agreements, exhibits or certificates contemplated hereby, the losing party shall pay the prevailing party’s reasonable attorney’s fees upon final settlement, judgment or appeal thereof.

Section 7.17. Computation of Time Periods . All periods of time referred to in this Agreement shall include all Saturdays, Sundays and state or national holidays, unless the period of time specifies Business Days, provided that if the date or last date to perform any act or give any notice or approval shall fall on a Saturday, Sunday or national holiday, such act or

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notice may be timely performed or given on the next succeeding day which is not a Saturday, Sunday or national holiday.

Section 7.18. Captions . The section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection hereof.

Section 7.19. Construction . The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.

Section 7.20. Tax Matters .

(a) Seller shall prepare and file (or prior to Closing, cause the Company to prepare and file) any and all returns, declarations, reports, elections, claims for refund or information returns or other statements or forms relating to, filed or required to be filed with any Tax authority, including any schedule or attachment thereto or any amendment thereof (each, a “ Tax Return ”) required to be filed by the Company for all tax periods of the Company that end on or before the Closing Date, and shall pay or cause to be paid all Taxes shown due thereon. Seller shall provide Purchaser with copies of each such Tax Return at least ten (10) days prior to each such Tax Return’s due date and permit Purchaser to review and comment on each such Tax Return. Purchaser shall cause the Company to timely file any Tax Returns with a filing due date that is after the Closing Date for tax periods of the Company that begin after the Closing Date and shall pay or cause to be paid all Taxes with respect to such tax periods. Purchaser agrees to cause the appropriate corporate officer to execute any Tax Return of the Company which Seller is required to prepare and file under this Section 7.20(a). For purposes hereof, “ Tax ” or “ Taxes ” means any and all taxes, fees, levies, duties, tariffs, imposts, and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any government or taxing authority, including taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation, or net worth; taxes or other charges in the nature of excises, withholding, ad valorem, stamp, transfer, value added, or gains taxes; license, registration and documentation fees; and customs’ duties, tariffs, and similar charges other than any such amounts subject to proration pursuant to Section 4.5.

(b) Seller shall indemnify the Company and Purchaser and hold them harmless from and against without duplication, any loss, claim, liability, expense, or other damage attributable to (1) all Taxes (or the non-payment thereof) of the Company for all taxable periods ending on or before the Closing Date and the portion through the end of the Closing Date for any taxable period that includes (but does not end on) the Closing Date (“ Pre-Closing Tax Period ”) (determined in accordance with Section 7.20(c) below); and (2) any and all Taxes of any person (other than the Company) imposed on the Company as a transferee or successor, by

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contract or pursuant to any similar law, rule or regulation for a Pre-Closing Tax Period (determined in accordance with Section 7.20(c) below).

(c) In the case of any taxable period that includes (but does not end on) the Closing Date (a “ Straddle Period ”), (i) the amount of any Taxes based on or measured by income or receipts of the Company for the portion of such Straddle Period ending on the Closing Date shall be determined based on an interim closing of the books as of the close of business on the Closing Date and (ii) the amount of Taxes other than those based on or measured by income or receipts of the Company for such Straddle Period that relates to the portion of such Straddle Period ending on the Closing Date shall be deemed to be the amount of such Tax for the entire Straddle Period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in such Straddle Period.

(d) Except to the extent required by law, Purchaser shall not amend, and shall not permit the Company to amend, any Tax Return filed by, or election with respect to, the Company for any tax period ending on or prior to Closing without the prior written consent of Seller if such amendment could have the effect of increasing (i) the amount of tax payable by Seller with respect to such period or (ii) the amount of any indemnity payment due from Seller pursuant to Section 7.20(b) above.

(e) Purchaser and Seller covenant and agree to cooperate with each other regarding tax matters as follows:

(i) Purchaser and Seller shall cooperate, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns pursuant to this Section 7.20 and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information that are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Purchaser and Seller (or an affiliate of Seller) agree (A) to retain all books and records with respect to tax matters pertinent to the Company relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by Purchaser or Seller, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) to give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if any party so requests, the other party, shall allow such party to take possession of such books and records.

(ii) Purchaser and Seller further agree, upon request, to use their reasonable efforts to obtain any certificate or other document from any governmental authority or any other person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby).

(iii) Purchaser shall notify Seller in writing within ten (10) days after receipt by Purchaser or the Company of any determination of liability for Taxes from an official

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inquiry, examination, audit, or administrative or judicial proceeding (“ Tax Audit Determination ”) regarding any Tax Return related to a period that ends on or prior to the Closing Date. Seller shall have the right to exercise control, on behalf of the Company for any such Tax Return, and at its own expense, at any time over the handling, disposition or settlement of any issue raised in any such Tax Audit Determination. Purchaser and the Company shall cooperate with Seller, as reasonably requested by such representative, in connection with any such Tax Audit Determination. Purchaser shall have the right (but not the duty) to participate in the defense of such Tax Audit Determination and to employ counsel, at its own expense, separate from the counsel employed by Seller. If Purchaser elects to participate in the defense of any Tax Audit Determination, then Purchaser shall be entitled to, without in any way limiting or affecting Seller right to control the defense of such Tax Audit Determination, (i) participate fully in the conduct of such Tax Audit Determination, including participating in all conferences and attending all meetings with the relevant authorities, (ii) consult with Seller, at its own expense, regarding any such Tax Audit Determination, and Seller shall consider in good faith any suggestions made by Purchaser, and (iii) receive copies of all documents (or portions thereof) relating to such Tax Audit Determination.

(iv) Seller shall notify Purchaser in writing within ten (10) days after receipt by Seller of any Tax Audit Determination regarding any Tax Return for the Straddle Period or any period thereafter. Purchaser, on behalf of the Company, shall have the right to exercise control over the handling, disposition or settlement of all Tax Audit Determinations regarding the Straddle Period; provided that Purchaser may not settle any Tax Audit Determination or extend an applicable statute of limitations in connection with a Tax Audit Determination without the prior written consent of the Purchaser if any such settlement or extension could have the effect of increasing (i) the amount of tax payable by Seller with respect to a Pre-Closing Tax Period or (ii) the amount of any indemnity payment due from Seller pursuant to Section 7.20(b) above. Seller shall have the right (but not the duty) to participate in the defense of such Tax Audit Determination and to employ counsel, at its own expense, separate from the counsel employed by Purchaser. If Seller elects to participate in the defense of any Tax Audit Determination, then Seller shall be entitled to, without in any way limiting or affecting Purchaser right to control the defense of such Tax Audit Determination (subject to the express limitations set forth in this Section 7.20(e)(iv), (i) participate fully in the conduct of such Tax Audit Determination, including participating in all conferences and attending all meetings with the relevant authorities, (ii) consult with Purchaser, at its own expense, regarding any such Tax Audit Determination, and Purchaser shall consider in good faith any suggestions made by Seller, and (iii) receive copies of all documents (or portions thereof) relating to such Tax Audit Determination.

(f) Purchaser and Seller further agree that, upon receipt by Purchaser of any tax refund, abatement, credit or similar benefit with respect to the Pre-Closing Tax Period (including, for the avoidance of doubt, the portion of a Straddle Period ending on the Closing Date), Purchaser will promptly pay to Seller an amount equal to such tax refund, abatement, credit or similar benefit (or, with respect to a Straddle Period, Seller’s portion thereof, determined in accordance with the principles of Section 7.20(c) above).

(g) Except as expressly set forth in Section 7.20(e)(i), this Section 7.20 shall survive until the second anniversary of the Closing.

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ARTICLE VIII.

DEFINED TERMS

Section 8.1. Defined Terms . Certain capitalized terms used in this Agreement will have the meanings set forth below or in the Section of this Agreement referred to below:

(a) “ Additional Deposit ” is defined in Section 1.5.

(b) “ Agreement ” is defined in the preamble to this Agreement.

(d) “ Business Day ” means any day except a Saturday, Sunday or other day which in Louisville, Kentucky is a legal holiday or a day on which banking institutions are authorized by law or executive action to close.

(e) “ Closing ” is defined in Section 4.1.

(f) “ Closing Date ” is defined in Section 4.1.

(g) “ Closing Statement ” is defined in Section 4.5(a).

(h) “ Company ” is defined in the recitals to this Agreement.

(i) “ Contracts ” means all contracts and agreements relating to the upkeep, repair, maintenance or operation of the Property which will extend beyond the Closing Date.

(j) “ Contract Period ” is defined in Section 3.2(a).

(k) “ Deposit ” is defined in Section 1.5.

(l) “ Effective Date ” is defined in the preamble to this Agreement.

(m) “ Escrow Agent ” is defined in Section 1.5.

(n) “ Expiration of the Due Diligence Period ” is defined in Section 2.3(a).

(o) “ Final Closing Statement ” is defined in Section 4.5(g).

(p) “ Initial Deposit ” is defined in Section 1.5.

(q) “ Interests ” is defined in the recitals to this Agreement.

(r) “ Leases ” means the leases, licenses and occupancy agreements covering all or any portion of the Property to the extent they are in effect on the Closing Date.

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(s) “ Major Damage ” means (i) any loss or damage to the Property that constitutes Property Damage under clause (i) or (ii) of the definition thereof such that the cost of repairing or restoring the affected portion of the Property to substantially the same condition which existed prior to such Property Damage would be, as reasonably agreed by Seller and Purchaser, equal to or greater than $250,000 or (ii) any loss due to a condemnation that permanently results in a material adverse effect on the current use of or access to the Property.

(t) “ Monetary Liens ” means (i) any mortgage, deed to secure debt, deed of trust, security interest or similar security instrument encumbering all or any part of the Property, (ii) any mechanic’s, materialman’s or similar lien, which if disputed and not yet resolved may be bonded over by Seller or the Company (but not including any such lien resulting from any act or omission of Purchaser or any of its agents, contractors, representatives or employees), (iii) a lien of ad valorem real or personal property taxes, assessments and governmental charges affecting all or any portion of the Property that are delinquent or will be delinquent on the Closing Date, (iv) any monetary judgment of record against Seller or the Company which is a judgment attaching to the Property, and (v) any encumbrances or restrictions that have been voluntarily placed on the Property by Seller or the Company after the Effective Date without Purchaser’s prior written consent.

(u) “ Permitted Exceptions ” means (i) any easement, right of way, encroachment, conflict, discrepancy, overlapping of improvements, protrusion, restriction, condition, covenant, non-monetary exception or other matter with respect to the Property that is reflected or addressed on the Survey or Seller’s (or the Company’s) current owner’s policy of title insurance for the Property and to which Purchaser does not object in accordance with Section 2.2 hereof; (ii) the rights and interests of parties claiming under the unrecorded Leases, as tenants only without any rights to purchase; (iii) real estate taxes and assessments not yet due and payable; and (iv) the standard printed exceptions set forth in the Title Policy to be issued by the Title Company.

(v) “ Property ” is defined in the recitals to this Agreement.

(w) “ Property Damage ” means (i) any loss or damage to the Property arising due to casualty, (ii) any material loss or damage to the Property arising after the Expiration of the Due Diligence Period (excepting reasonable wear and tear) in excess of $10,000 as reasonably agreed by Seller and Purchaser or (iii) a condemnation of all or any portion of the Property.

(x) “ Purchase Price ” is defined in Section 1.2.

(y) “ Purchaser ” is defined in the preamble to this Agreement.

(z) “ Purchaser Closing Certificate ” is defined in Section 4.7(c).

(aa) “ Related Agreements ” means the Oxmoor Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, Jamestown Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, Meadows Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, and Prospect Park Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof.

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(bb) “ Released Parties ” is defined in Section 2.7.

(cc) “ Security Deposits ” means any and all guaranties and security deposits deposited by the Tenants relating to the Leases used to secure performance of any Tenants’ rental or other obligations thereunder, to the extent such security deposits have not been applied as allowed under the Leases as of the Closing Date.

(dd) “ Seller ” is defined in the preamble to this Agreement.

(ee) “ Seller Closing Certificate ” is defined in Section 4.6(c).

(ff) “ Seller Diligence Deliveries ” is defined in Section 2.1.

(gg) “ Seller Parties ” means Seller and the Company.

(hh) “ Survey ” is defined in Section 2.2(a).

(ii) “ Tenants ” means the tenants or occupants under the Leases.

(jj) “ Title Commitment ” is defined in Section 2.1(a).

(kk) “ Title Company ” is defined in Section 2.1(a).

(ll) “ Title Objections ” is defined in Section 2.2(b).

(mm) “ Title Policy ” means an ALTA (2006) owner’s policy of title insurance with extended coverage for the Property in the full amount of the Purchase Price, insuring title to the Property in Purchaser, subject only to the Permitted Exceptions and containing the following endorsements, to the extent applicable and available in Louisville, Kentucky: ALTA 3.1-06, ALTA 8.2-06, ALTA 9.2-06, ALTA 17-06 or ALTA 17.1-06, ALTA 17.2-06, ALTA 18-06 or ALTA 18.1-06, ALTA 22-06, ALTA 25-06, ALTA 26-06, ALTA 19-06, ALTA 28-06.

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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the Effective Date.


SELLER:

CRA-B1 FUND, LLC, a Delaware limited liability company

By:	Continental Realty Services, LLC, a Colorado limited liability company, its Manager

	By:	/s/ David W. Snyder
		Name:	David W. Snyder
		Title:	Manager

[Signature Page to Purchase and Sale Agreement - Brookside]


PURCHASER:

INDEPENDENCE REALTY OPERTING PARTNERSHIP, LP, a Delaware limited partnership

By:	Independence Realty Trust, Inc., and Maryland corporation

	By:	Independence Realty Advisors, LLC,
		a Delaware limited liability
		company, its external advisor

		By:	/s/ Farrell Ender
			Name:	Farrell Ender
			Title:	President

[Signature Page to Purchase and Sale Agreement - Brookside]

JOINDER BY ESCROW AGENT

Escrow Agent hereby executes this Agreement below solely for the purpose of acknowledging and agreeing to be bound by the provisions of Sections 1.5 and 1.6.


ESCROW AGENT:

LAND SERVICES USA, INC.

By:	/s/ Alison Zugschwest
	Name:	Alison Zugschwest
	Title:	Title Officer

[Signature Page to Purchase and Sale Agreement - Brookside]

Schedule 1.3

Allocation of Purchase Price


	Allocations
Real Property	$	19,700,000
Personal Property	$	300,000

Total Purchase Price	$	20,000,000

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Schedule 2.2(c)

Alternate Title Insurance Companies

Chicago Title Insurance Company

Commonwealth Land Title Insurance Company

Fidelity National Title Insurance Company

Old Republic National Title Insurance Company

Stewart Title Guaranty Company

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Schedule 3.1(o)

Brokerage Agreements

1.	Exclusive Sales Listing Agreement, dated as of April 1, 2014, by and between CBRE Inc. and Brookside CRA-B1, LLC, as amended by the Amendment to Listing Agreement, dated as of July 22, 2014.

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Schedule 3.1(x)

Organizational Documents of the Company

1.	Certificate of Formation of Brookside CRA-B1, LLC dated as of October 19, 2011 and filed with the Secretary of State of the State of Delaware on October 20, 2011.

2.	First Amended Limited Liability Company Agreement of Brookside CRA-B1, LLC dated as of November 23, 2011.

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Exhibit A

Description of Land

Beginning at the Southwest corner of the tract conveyed to John and Florence Hislop, as recorded in Deed Book 5432, Page 985, in the office of the Clerk of Jefferson County, Kentucky; thence with the West line of said Hislop, North 36° 59’ 28” West 437.68 feet to a pipe; thence South 46° 21’ 00” West 139.28 feet to a pipe; thence North 36° 22’ 34” West 386.10 feet to a pipe; thence North 36° 43’ 51” West 494.96 feet to a pipe; thence North 54° 41’ 50” East 309.92 feet to a pipe; thence with a proposed new division line, South 36° 43’ 51” East 490.92 feet to a pipe; thence North 53° 57’ 00” East 636.96 feet to a point; said point being the Southwest corner of a 15 foot wide roadway, as described in Deed Book 2335, Page 133, in the office aforesaid; thence with the West line of said road, North 25° 48’ 07” West 458.78 feet to the South right of way line of Wood Avenue; thence with Wood Avenue, North 66° 34’ 26” East 15.21 feet to the Northeast corner of said 15 foot roadway; thence South 25° 48’ 07” East 455.41 feet to a pipe in the North line of said Hislop; thence North 53° 57’ 00” East 212.82 feet to a pipe; thence South 13° 13’ 00” East 164.49 feet to a point; thence South 12° 20’ 00” West 189.62 feet to a pipe; thence South 39° 08’ 00” West 165.18 feet to a pipe; thence South 46° 53’ 00” West 202.50 feet to a pipe; thence South 50° 06’ 00” West 189.39 feet to a pipe; thence South 52° 41’ 00” West 138.78 feet to a pipe; thence South 36° 59’ 28” East 244.73 feet to the Northwest corner of the tract conveyed to Paragon Group, Inc., as recorded in Deed Book 5517, Page 580, in the office aforesaid; thence with Paragon, North 53° 54’ 52” East 70.11 feet to a pipe; thence South 36° 57’ 56” East 199.87 feet to the Northwest right of way line of Whipps Mill Road; thence with Whipps Mill Road, South 53° 51’ 29” West 211.01 feet to the point of beginning.

Being a consolidation of Tracts 1, 2, 3, 4 and 5, as shown on the Minor Subdivision Plat approved by the Louisville and Jefferson County Planning Commission, attached to the Deed of record in Deed Book 5540, Page 280, in the office aforesaid.

Tax Data: ID No. 21-0021-0157-0000

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Exhibit B

Seller Diligence Deliveries


1		Utility Account List (including names/addresses of utility companies; account numbers; contact names)
2		Utility billing program/detail for residents and vacant units
3		Current Rent Roll (PDF & Excel)
4		Tenant concession schedule
5		Real Estate Tax Bills for the Past Three Years
6		Property Financial and Operating Statements for 2011 (for portions of such year when the Property was owned by the Company), 2012, 2013 and YTD 2014 (PDF & Excel)
7		Property General Ledgers YTD and Past 3 Years (PDF & Excel)
8		Property Operating Budgets, if available
9		Capital Expenditure Summary for 2011 (for portions of such year when the Property was owned by the Company), 2012, 2013 and YTD 2014
10		Aged Payables and Receivables schedule
11		Payroll schedule
12		Property management contract
13		Current property, liability, rent loss and other insurance certificates
14		Insurance Claims History/Loss Runs for the Past Three Years
15		Bank statements for the past 12 months
16		Existing Vendor List (including name, address, phone number, and contact)
17		All Service and Operating Contracts and Invoices (including cable, trash & laundry if applicable)
18		List of Personal Property
19		Existing Tenant Leases and occupancy agreements to be made available on site
20		Leasing/Marketing Materials
21		Warranties, if any
22		Standard form of apartment lease
23		Intentionally Omitted
24		Construction Plan Drawings and Specification Books, to be made available on site, if any
25		Copies of permits and licenses related to or affecting the Property
26		Certificate of Occupancy, if any
27		Existing title policy and all documents and instruments referenced therein
28		Environmental reports prepared for the Seller, including asbestos and environmental audits and analyses
29		List of all pending or threatened litigation relating to Seller or the Property
30		Engineering reports, if available

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31		Most Recent ALTA/ACSM As-Built Survey
32		Master Lease, if any
33		Most Recent City and Fire Inspection Reports, if any
34		Site Plan
35		Construction Contracts for significant repairs within the last 24 months

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Exhibit C

Rent Roll

[Attached.]

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Exhibit D

Form of Assignment and Assumption of Membership Interests

ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS

THIS ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS (this “ Assignment ”), is made as of , 2014 by and between , a (“ Assignor ”), and , a (“ Assignee ”).

W I T N E S S E T H:

WHEREAS, Assignor owns one hundred percent (100%) of the limited liability company interests in the Company (such interests, together with all rights, powers and obligations of Assignor as a member of the Company, the “ Interests ”);

WHEREAS, pursuant to the terms of that certain Purchase and Sale Agreement, dated as of , 2014, by and between Assignor, and Assignee (the “ Sale Agreement ”), Assignor agreed to sell to Assignee, inter alia , the Interests. Initially capitalized terms not otherwise defined herein shall have the respective meanings ascribed to such terms in the Sale Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows:

1. Assignment . Assignor hereby assigns, sets over and transfers to Assignee all of Assignor’s right, title and interest in, to and under the Interests.

2. Assumption . Assignee hereby accepts the foregoing assignment of the Interests and assumes all of Assignor’s obligations with respect to the Interests arising under the limited liability company agreement of the Company from and after the date hereof.

3. Effect of Transfer . As of the date hereof, the capital account of Assignor in the Company with respect to the Interest will be transferred to Assignee. From and after the date hereof, the profits or losses of the Company and all other items of income, gain, loss, deduction, or credit allocable to the Interest on or after the date hereof shall be credited or charged, as the case may be, to Assignee and not to Assignor. Assignee shall be entitled to all distributions or payments in respect of the Interest made on or after the date hereof, regardless of the source of those distributions or payments or when the same were earned or received by the Company. Nothing in this Assignment will affect the allocation to Assignor of profits, losses, and other items of income, gain, loss, deduction, or credit attributable to any period before the date hereof or any distribution or payments made to Assignor in respect of the Interest before such date.

4. Withdrawal . Assignor hereby withdraws as a member of the Company, and Assignee is hereby substituted as the sole member of the Company.

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5. Miscellaneous . This Assignment and the obligations of the parties hereunder shall survive the closing of the transaction referred to in the Sale Agreement and shall not be merged therein, shall be binding upon and inure to the benefit of the parties hereto, their respective legal representatives, successors and assigns, shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be wholly performed within said State and may not be modified or amended in any manner other than by a written agreement signed by the party to be charged therewith.

6. Severability . If any term or provision of this Assignment or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Assignment or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Assignment shall be valid and enforced to the fullest extent permitted by law.

7. Counterparts . This Assignment may be executed in counterparts, each of which shall be an original and all of which counterparts taken together shall constitute one and the same agreement. Signatures to this Assignment transmitted by facsimile or electronic mail shall be valid and effective to bind the party so signing.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the day and year first above written.


ASSIGNOR :		, a(n)


	By:

	Name:

	Title:

ASSIGNEE :		, a(n)


	By:

	Name:

	Title:

-11-

Exhibit E

Form of FIRPTA Affidavit

Section 1445 of the Internal Revenue Code provides that a transferee of a United States real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax is not required upon the disposition of a United States real property interest by [ ], a Delaware limited liability company, the undersigned hereby certifies the following on behalf of [ ]:

(a) [ ] (“ ”), is the indirect sole member of [ ], a Delaware limited liability company.

(b) [ ] is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); and

(d) [ ] address is [ ], Attention: President.

[ ] understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

The undersigned authorized signatory of [ ] declares that he has examined this certification and to the best of his knowledge and belief it is true, correct and complete, and he further declares that he has authority to sign this document on behalf of [ ].

Dated: As of [ ], 2014.


By:
Name:
Title:

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Exhibit 10.22

Execution

JAMESTOWN

INTEREST PURCHASE AND SALE AGREEMENT

by and between

CRA-B1 FUND, LLC,

as Seller

and

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP,

as Purchaser

Dated as of October 20, 2014

Table of Contents


		Page

ARTICLE I. PURCHASE AND SALE			1

Section 1.1.	Agreement of Purchase and Sale.		1

Section 1.2.	Purchase Price.		1

Section 1.3.	Purchase Price Allocation.		1

Section 1.4.	Payment of the Purchase Price.		2

Section 1.5.	Deposit.		2

Section 1.6.	Escrow Agent.		2

ARTICLE II. TITLE AND SURVEY; DUE DILIGENCE PERIOD			3

Section 2.1.	Seller Diligence Deliveries.		3

Section 2.2.	Title Review.		3

Section 2.3.	Due Diligence Period.		5

Section 2.4.	Right of Termination.		6

Section 2.5.	No Reliance.		6

Section 2.6.	As-Is, Where-Is.		7

Section 2.7.	Environmental Waiver and Release.		8

Section 2.8.	Survival.		8

ARTICLE III. REPRESENTATIONS, WARRANTIES AND COVENANTS			8

Section 3.1.	Representations and Warranties of Seller.		8

Section 3.2.	Seller’s Covenants.		13

Section 3.3.	Representations and Warranties of Purchaser.		14

Section 3.4.	Purchaser’s Covenants.		15

Section 3.5.	No Brokers.		15

Section 3.6.	Survival; Limitation on Liability of Seller Parties.		15

ARTICLE IV. CLOSING			16

Section 4.1.	Closing Date.		16

Section 4.2.	Closing Costs.		16

Section 4.3.	Conditions Precedent to the Obligations of Seller.		16

Section 4.4.	Conditions Precedent to the Obligations of Purchaser.		17

Section 4.5.	Credits and Prorations.		18

Section 4.6.	Seller’s Obligations at Closing.		20

Section 4.7.	Purchaser’s Obligations at Closing.		21

Section 4.8.	Application of Purchase Price to Monetary Liens at Closing.		22

ARTICLE V. RISK OF LOSS			22

Section 5.1.	Minor Damage.		22

Section 5.2.	Major Damage.		22

Table of Contents (continued)


		Page

ARTICLE VI. DEFAULT AND REMEDIES			23

Section 6.1.	Default by Seller; Purchaser’s Remedies.		23

Section 6.2.	Default by Purchaser; Seller’s Remedies.		23

Section 6.3.	Indemnification Obligations.		24

Section 6.4.	Limitation on Seller Parties’ Personal Liability.		24

ARTICLE VII. MISCELLANEOUS			25

Section 7.1.	Confidentiality.		25

Section 7.2.	Seller Confidentiality and Trading.		26

Section 7.3.	Record Access and Retention.		26

Section 7.4.	Related Agreements.		26

Section 7.5.	Assignment.		27

Section 7.6.	Notices.		27

Section 7.7.	Modifications.		28

Section 7.8.	Entire Agreement.		28

Section 7.9.	Further Assurances.		28

Section 7.10.	Counterparts.		28

Section 7.11.	Electronic or Facsimile Signatures.		28

Section 7.12.	Severability.		29

Section 7.13.	Applicable Law.		29

Section 7.14.	No Third-Party Beneficiaries.		29

Section 7.15.	No Recordation.		29

Section 7.16.	Prevailing Party.		29

Section 7.17.	Computation of Time Periods.		29

Section 7.18.	Captions.		30

Section 7.19.	Construction.		30

Section 7.20.	Tax Matters.		30

ARTICLE VIII. DEFINED TERMS			33

Section 8.1.	Defined Terms.		33

Table of Contents


	Page

List of Schedules and Exhibits

Schedule 1.3 – Allocation of Purchase Price		1
Schedule 2.2(c) – Alternate Title Insurance Companies		2
Schedule 3.1(o) – Brokerage Agreements		3
Schedule 3.1(x) – Company’s Organizational Documents		4

Exhibit A – Description of Land		5
Exhibit B – Seller Diligence Deliveries		7
Exhibit C – Rent Roll		9
Exhibit D – Form of Assignment and Assumption of Membership Interests		10
Exhibit E – Form of FIRPTA Affidavit		13

iii

INTEREST PURCHASE AND SALE AGREEMENT

RECITALS

A. Seller owns 100% of the limited liability company interests (the “ Interests ”) in Jamestown CRA-B1, LLC, a Delaware limited liability company (the “ Company ”).

B. The Company owns the parcel of land located at 900 Milford Lane, Louisville, KY 40207 and described more particularly in Exhibit A attached hereto and made a part hereof, together with all rights and appurtenances pertaining to such property, including any right, title and interest of the Company in and to adjacent streets, alleys, easements or rights-of-way, together with any improvements thereon, but subject to the Permitted Exceptions (collectively, the “ Property ”).

C. Purchaser desires to purchase the Interests and Seller desires to sell the Interests to Purchaser, subject to the terms and provisions set forth herein.

AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:

ARTICLE I.

PURCHASE AND SALE

Section 1.2. Purchase Price . Seller agrees to sell and Purchaser agrees to purchase the Interests for the amount of $35,000,000 (the “ Purchase Price ”).

other filings consistent with the allocations set forth on Schedule 1.3 . The provisions of this Section 1.3 shall survive the Closing.

Section 1.5. Deposit . On or prior to 5:00 p.m. Eastern time on the third Business Day after the Effective Date, Purchaser shall deposit with Land Services USA, Inc. (the “ Escrow Agent ”) an amount equal to$215,384 (the “ Initial Deposit ”) in cash by wire transfer of immediately available federal funds, and failing which, Seller may terminate this Agreement by giving written notice to Purchaser. On or prior to the Expiration of the Due Diligence Period, unless Purchaser has terminated this Agreement pursuant to Section 2.4, Purchaser shall deposit with the Escrow Agent an amount equal to $215,384 (the “ Additional Deposit ”) in cash by wire transfer of immediately available federal funds, and failing which, Seller may terminate this Agreement by giving written notice to Purchaser. The Initial Deposit and the Additional Deposit, plus any interest accrued thereon, shall be collectively referred to herein as the “ Deposit ”. The Deposit shall be deemed to have been fully earned by Seller upon the execution and delivery of this Agreement and shall be non-refundable except (i) pursuant to Section 2.2(b), (ii) pursuant to Section 2.4, (iii) pursuant to Section 5.2 or (iv) in the event of a default hereunder by Seller and a termination of this Agreement by Purchaser under Section 6.1, and if the Closing occurs the Deposit shall be paid to Seller and credited against the Purchase Price at the Closing in accordance with the terms of Section 1.3. Until the Closing or earlier termination of this Agreement, the Escrow Agent shall hold the Deposit and all interest thereon and proceeds thereof subject to the terms of this Agreement.

Section 1.6. Escrow Agent .

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ARTICLE II.

TITLE AND SURVEY; DUE DILIGENCE PERIOD

Section 2.2. Title Review .

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Section 2.3. Due Diligence Period .

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patent construction defects or physical conditions, violations or any applicable laws and any and all other facts, omissions, events, circumstances or matters regarding the Property.

Section 2.8. Survival . The provisions of Sections 2.3, 2.4, 2.5, 2.6 and 2.7 and this Section 2.8 shall survive the Closing or any termination of this Agreement.

ARTICLE III.

REPRESENTATIONS, WARRANTIES AND COVENANTS

-8-

(h) Non-Foreign Entity . Seller is not a “foreign person” within the meaning of Section 1445(f) of the Internal Revenue Code of 1986, as amended.

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(j) ERISA . Seller is not a “benefit plan investor” within the meaning of and subject to the Employee Retirement Income Security Act of 1974, as amended.

(m) Condemnation . Seller has received no written notice of and has no knowledge of any pending or threatened condemnation proceedings relating to the Property.

(n) Title . There are no outstanding agreements, options, rights of first refusal or rights of first offer with respect to the purchase and sale of the Property other than this Agreement.

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(t) Employees . The Company has no employees.

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References to the “knowledge” of Seller refer only to the current actual knowledge of David W. Snyder and Paul Priebe without any duty of inquiry or investigation and shall not be

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Section 3.2. Seller’s Covenants .

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herein, “ Rent Ready Condition ” shall mean “made ready” and suitable for occupancy in accordance with the Company’s current standards.

(f) Delinquency Report . Seller shall provide Purchaser with a delinquency report on a monthly basis until Closing, listing all delinquent tenants by amount and time delinquent.

(c) Consents . No consent, waiver, approval or authorization is required from any person or entity (that has not already been obtained) in connection with the execution and delivery of this Agreement by Purchaser or the performance by Purchaser of the transactions contemplated hereby.

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Section 3.4. Purchaser’s Covenants . During the Contract Period, Purchaser shall observe all of the covenants and conditions applicable to Purchaser hereunder.

Section 3.6. Survival; Limitation on Liability of Seller Parties .

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ARTICLE IV.

CLOSING

Section 4.3. Conditions Precedent to the Obligations of Seller . The obligation of Seller to consummate the transaction contemplated

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hereunder shall be subject to the fulfillment on or before the Closing Date of each of the following conditions, any or all of which may be waived by Seller in its sole discretion:

(d) Purchaser shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Purchaser as of the Closing Date; and

(e) the closing date under the Related Agreements shall be the same as the Closing Date hereunder, and the closing under the Related Agreements shall occur simultaneously with the Closing hereunder.

(c) Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Seller as of the Closing Date;

(d) Seller shall have paid off or caused to be removed any Monetary Liens or arranged for the payoff or removal of the same concurrent with the Closing pursuant to Section 4.8;

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Section 4.5. Credits and Prorations .

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be, shall make an appropriate payment to the other party based on such recalculation within 30 days after the parties agree on the recalculation.

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Section 4.6. Seller’s Obligations at Closing . At Closing, Seller shall:

(d) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Seller;

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(e) deliver to the Title Company an owner’s affidavit duly executed by the Company, in customary form reasonably acceptable to the Title Company;

(h) deliver an executed counterpart to the Closing Statement;

(k) deliver a schedule of Security Deposits currently held by Seller on behalf of the Tenants; and

(l) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement.

Section 4.7. Purchaser’s Obligations at Closing . At Closing, Purchaser shall:

(a) pay to Seller, in immediately available federal funds transferred by wire pursuant to Section 1.3, the full amount of the Purchase Price, subject to prorations and adjustments as provided herein;

(b) deliver to Seller an executed counterpart to the Assignment and Assumption of Membership Interests;

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(d) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Purchaser;

(e) deliver an executed counterpart to the Closing Statement; and

(f) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement.

ARTICLE V.

RISK OF LOSS

Section 5.2. Major Damage .

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ARTICLE VI.

DEFAULT AND REMEDIES

Section 6.2. Default by Purchaser; Seller’s Remedies .

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-24-

ARTICLE VII.

MISCELLANEOUS

Section 7.1. Confidentiality .

(d) The provisions of this Section 7.1 shall survive any termination of this Agreement or the Closing for a period of three (3) years.

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Section 7.4. Related Agreements . Seller and Purchaser acknowledge that, simultaneously with the execution of this Agreement, Seller and Purchaser are entering into the

-26-


If to Seller:		Jamestown CRA-B1, LLC
		c/o Continental Realty Advisors, Ltd.
		10579 W. Bradford Road, Suite 100
		Littleton, Colorado 80172
		Attn: David W. Snyder

with a copy to each of:		Hamil/Martin LLC
		140 East 19 ^th Avenue, Suite 600
		Denver, Colorado, 80203-1035
		Attn: Larry Hamil, Esq.

		Ropes & Gray LLP
		Prudential Tower
		800 Boylston Street
		Boston, Massachusetts 02199
		Attn: Marc D. Lazar, Esq.
		Telephone: (617) 951-7866

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	Email: marc.lazar@ropesgray.com

If to Purchaser:	Independence Realty Operating Partnership, LP
	c/o RAIT Financial Trust
	Cira Centre
	2929 Arch Street, 17 ^th Floor
	Philadelphia, PA 19104
	Attention:	Farrell Ender
	Email:	fender@irtreit.com
with a copy to:
	RAIT Financial Trust
	2929 Arch Street, 17 ^th Floor
	Philadelphia, PA 19104
	Attention:	Jamie Reyle, Esquire
	Facsimile:	215.405.2945
	Email:	jreyle@raitft.com

Section 7.11. Electronic or Facsimile Signatures . In order to expedite

-28-

Section 7.13. Applicable Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Kentucky without giving effect to any conflict of laws principles.

-29-

notice may be timely performed or given on the next succeeding day which is not a Saturday, Sunday or national holiday.

Section 7.20. Tax Matters .

(b) Seller shall indemnify the Company and Purchaser and hold them harmless from and against without duplication, any loss, claim, liability, expense, or other damage attributable to (1) all Taxes (or the non-payment thereof) of the Company for all taxable periods ending on or before the Closing Date and the portion through the end of the Closing Date for any taxable period that includes (but does not end on) the Closing Date (“ Pre-Closing Tax Period ”)(determined in accordance with Section 7.20(c) below); and (2) any and all Taxes of any person (other than the Company) imposed on the Company as a transferee or successor, by

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contract or pursuant to any similar law, rule or regulation for a Pre-Closing Tax Period (determined in accordance with Section 7.20(c) below).

(e) Purchaser and Seller covenant and agree to cooperate with each other regarding tax matters as follows:

(iii) Purchaser shall notify Seller in writing within ten (10) days after receipt by Purchaser or the Company of any determination of liability for Taxes from an official

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(g) Except as expressly set forth in Section 7.20(e)(i), this Section 7.20 shall survive until the second anniversary of the Closing.

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ARTICLE VIII.

DEFINED TERMS

Section 8.1. Defined Terms . Certain capitalized terms used in this Agreement will have the meanings set forth below or in the Section of this Agreement referred to below:

(a) “ Additional Deposit ” is defined in Section 1.5.

(b) “ Agreement ” is defined in the preamble to this Agreement.

(e) “ Closing ” is defined in Section 4.1.

(f) “ Closing Date ” is defined in Section 4.1.

(g) “ Closing Statement ” is defined in Section 4.5(a).

(h) “ Company ” is defined in the recitals to this Agreement.

(i) “ Contracts ” means all contracts and agreements relating to the upkeep, repair, maintenance or operation of the Property which will extend beyond the Closing Date.

(j) “ Contract Period ” is defined in Section 3.2(a).

(k) “ Deposit ” is defined in Section 1.5.

(l) “ Effective Date ” is defined in the preamble to this Agreement.

(m) “ Escrow Agent ” is defined in Section 1.5.

(n) “ Expiration of the Due Diligence Period ” is defined in Section 2.3(a).

(o) “ Final Closing Statement ” is defined in Section 4.5(g).

(p) “ Initial Deposit ” is defined in Section 1.5.

(q) “ Interests ” is defined in the recitals to this Agreement.

(r) “ Leases ” means the leases, licenses and occupancy agreements covering all or any portion of the Property to the extent they are in effect on the Closing Date.

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(v) “ Property ” is defined in the recitals to this Agreement.

(x) “ Purchase Price ” is defined in Section 1.2.

(y) “ Purchaser ” is defined in the preamble to this Agreement.

(z) “ Purchaser Closing Certificate ” is defined in Section 4.7(c).

(aa) “ Related Agreements ” means the Brookside Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, Oxmoor Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, Meadows Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, and Prospect Park Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof.

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(bb) “ Released Parties ” is defined in Section 2.7.

(dd) “ Seller ” is defined in the preamble to this Agreement.

(ee) “ Seller Closing Certificate ” is defined in Section 4.6(c).

(ff) “ Seller Diligence Deliveries ” is defined in Section 2.1.

(gg) “ Seller Parties ” means Seller and the Company.

(hh) “ Survey ” is defined in Section 2.2(a).

(ii) “ Tenants ” means the tenants or occupants under the Leases.

(jj) “ Title Commitment ” is defined in Section 2.1(a).

(kk) “ Title Company ” is defined in Section 2.1(a).

(ll) “ Title Objections ” is defined in Section 2.2(b).

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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the Effective Date.


SELLER:

CRA-B1 FUND, LLC, a Delaware limited liability company

By:	Continental Realty Services, LLC,
	a Colorado limited liability company,
	its Manager

	By:	/s/ David W. Snyder
		Name:	David W. Snyder
		Title:	Manager

[Signature Page to Purchase and Sale Agreement - Jamestown]


PURCHASER:

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP, a Delaware limited partnership

By:	Independence Realty Trust, Inc., and Maryland corporation

	By:	Independence Realty Advisors, LLC,
		a Delaware limited liability
		company, its external advisor

		By:	/s/ Farrell Ender
			Name:	Farrell Ender
			Title:	President

[Signature Page to Purchase and Sale Agreement - Jamestown]

JOINDER BY ESCROW AGENT

Escrow Agent hereby executes this Agreement below solely for the purpose of acknowledging and agreeing to be bound by the provisions of Sections 1.5 and 1.6.


ESCROW AGENT:

LAND SERVICES USA, INC.

By:	/s/ Alison Zugschwert
	Name:	Alison Zugschwert
	Title:	Title Officer

[Signature Page to Purchase and Sale Agreement - Jamestown]

Schedule 1.3

Allocation of Purchase Price


	Allocations
Real Property	$	34,475,000
Personal Property	$	525,000

Total Purchase Price	$	35,000,000

-1-

Schedule 2.2(c)

Alternate Title Insurance Companies

Chicago Title Insurance Company

Commonwealth Land Title Insurance Company

Fidelity National Title Insurance Company

Old Republic National Title Insurance Company

Stewart Title Guaranty Company

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Schedule 3.1(o)

Brokerage Agreements

1.	Exclusive Sales Listing Agreement, dated as of April 1, 2014, by and between CBRE Inc. and Jamestown CRA-B1, LLC, as amended by the Amendment to Listing Agreement, dated as of July 22, 2014.

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Schedule 3.1(x)

Organizational Documents of the Company

1.	Certificate of Formation of Jamestown CRA-B1, LLC dated as of May 16, 2011 and filed with the Secretary of State of the State of Delaware on May 23, 2011.

2.	Limited Liability Company Agreement of Jamestown CRA-B1, LLC dated as of May 23, 2011.

-4-

Exhibit A

Description of Land

PARCEL I

Being a parcel of land lying on the north side of Interstate 64 and on the west side of Breckenridge Lane, in the City of St. Matthews, County of Jefferson, State of Kentucky, and being more particularly described as follows:

Beginning at an iron pin with identifier #2747 at the intersection of the west line of Breckenridge Lane, as widened, with the southeasterly line of the tract conveyed to Jamestown of St. Matthews Co., II (now known as Jamestown of St. Matthews Limited Partnership), by deed of record in Deed Book 4146, Page 415 in the office of the Clerk of Jefferson County, Kentucky, said point also being South 33 degrees 17 minutes 00 seconds East 152.80 feet, South 27 degrees 17 minutes 00 seconds East 183.99 feet and South 33 degrees 00 minutes 00 seconds East 119.25 feet as measured along said west line from its intersection with the south line of Hillsboro Road; thence with said west line South 55 degrees 55 minutes 00 seconds East 33.39 feet to an iron pin with identifier #2747, South 33 degrees 00 minutes 00 seconds East 215.00 feet to an iron pin with identifier #2747, North 57 degrees 00 minutes 00 seconds East 11.18 feet to an iron pin with identifier #2747, South 34 degrees 01 minute 37 seconds East 223.76 feet to an iron pin with identifier #2747, South 20 degrees 51 minutes 10 seconds East 162.05 feet to an iron pin with identifier #2747, and South 29 degrees 50 minutes 20 seconds East 544.07 feet to an iron pin with identifier #2747 at its intersection with the north line of Interstate 64; thence with said north line North 87 degrees 27 minutes 20 seconds West 382.00 feet to an iron pin with identifier #2747, South 88 degrees 44 minutes 20 seconds West 357.92 feet to an iron pin with identifier #2747, and South 85 degrees 32 minutes 30 seconds West 570.90 feet to an iron pin with identifier #2747 at its intersection with the line common to Williamsburg Estates, Section 2, a plat of record in Plat Book 24, Page 17 in the office aforesaid; thence with said common line North 34 degrees 04 minutes 30 seconds East 238.62 feet to an iron pin in the southeasterly line of the Jamestown of St. Matthews Co., II (now known as Jamestown of St. Matthews Limited Partnership) tract aforesaid; thence with said southeasterly line North 34 degrees 02 minutes 46 seconds East 1012.96 feet to the point of beginning, containing 15.22 acres.

The above description encompasses and describes Parcel 1 as shown in deed of record in Deed Book 3981, Page 585 (as to the buildings and improvements thereon) and Deed Book 5429, Page 932 in the office of the Clerk of Jefferson County, Kentucky.

PARCEL 2

Being a parcel of land lying on the west side of Breckenridge Lane and on the south side of Hillsboro Road and Prince William Street, in the City of St. Matthews, County of Jefferson, State of Kentucky and being more particularly described as follows:

Beginning at an iron pin with identifier #2747 at the intersection of the south line of Hillsboro Road with the west line of Breckenridge Lane, as widened; thence with said west line South 33 degrees 17 minutes 00 seconds East 152.80 feet to an iron pin with identifier #2747, South 27 degrees 17 minutes 00 seconds East 183.99 feet to an iron pin with identifier #2747 and South 33 degrees 00 minutes 00 seconds East 119.25 feet to an iron pin with identifier #2747 at its intersection with the northwesterly line of the tract conveyed to Jamestown of St. Matthews (now known as Jamestown of St. Matthews Limited Partnership) by deed of record in Deed Book 5429, Page 932 in the office of the Clerk of Jefferson County, Kentucky; thence with said northwesterly line South 34 degrees 02 minutes 46 seconds West 917.90 feet to an iron pin with identifier #2747 in same, said point also being North 34 degrees 02 minutes 46 seconds East 95.06 feet as measured along said northwesterly line from its intersection with

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the line common to Williamsburg Estates, Section 2, a plat of record in Plat Book 24, Page 17 in the office aforesaid; thence leaving said northwesterly line North 30 degrees 48 minutes 00 seconds West 341.21 feet to an iron pin with identifier #2747 at its intersection with the southeast line of property owned by Clara L. Matthews Trust, Deed Book 8188, Page 10 in the office aforesaid; thence with said southeast line and same, if extended, North 49 degrees 10 minutes 10 seconds East 177.70 feet to an iron pin with identifier #2747 at the southeast corner of property owned by the City of St. Matthews, Deed Book 4269, Page 105 in the office aforesaid; thence with a line common to said City of St. Matthews tract North 31 degrees 53 minutes 00 seconds West 186.50 feet to an iron pin with identifier #2747 at its intersection with the east line of Prince William Street; thence with said east line and with a curve to the right having a radius of 212.61 feet, the chord of which measures North 37 degrees 32 minutes 56 seconds East 116.03 feet to an iron pin with identifier #2747 in same; thence continuing with said east line North 53 degrees 11 minutes 00 seconds East 79.42 feet to an iron pin with identifier #2747 and with a curve to the left having a radius of 159.82 feet, the chord of which measures North 11 degrees 48 minutes 00 seconds East 211.18 feet to an iron pin with identifier #2747 in same; thence continuing with said east line North 29 degrees 19 minutes 00 seconds West 20.13 feet to an iron pin with identifier #2747 and with a curve to the right having a radius of 30 feet, the chord of which measures North 11 degrees 56 minutes 00 seconds East 39.56 feet to an iron pin with identifier #2747 at its intersection with the south line of Hillsboro Road aforesaid; thence with said south line North 53 degrees 11 minutes 00 seconds East 303.33 feet to the point of beginning, containing 8.61 acres.

The above description encompasses and describes Parcel 2 as referenced in deed of record in Deed Book 4146, Page 415 in the office of the Clerk of Jefferson County, Kentucky.

PARCEL 3

Being the remainder portion of deed of record in Deed Book 3981, Page 585 in the office of the Clerk of Jefferson County, Kentucky, lying west of Breckenridge Lane and north of Interstate 64, in the City of St. Matthews, County of Jefferson, State of Kentucky and being more particularly described as follows: Beginning at an iron pin with identifier #2747 at the intersection of the northwesterly line of the tract conveyed to Jamestown of St. Matthews Co. (now known as Jamestown of St. Matthews Limited Partnership) by deed of record in Deed Book 5429, Page 932, in the office of the Clerk of Jefferson County, Kentucky with the southwesterly line of the tract conveyed to Jamestown of St. Matthews Co., II (now known as Jamestown of St. Matthews Limited Partnership) by deed of record in Deed Book 4146, Page 415 in the office aforesaid, said point also being South 34 degrees 02 minutes 46 seconds West 917.90 feet as measured along said northwesterly line from its intersection with the west line of Breckenridge Lane as widened; thence continuing with said northwesterly line South 34 degrees 02 minutes 46 seconds West 95.06 feet to an iron pin with identifier #2747 at its intersection with the line common with Williamsburg Estates, Section 2, a plat of record in Plat Book 24, Page 17 in the office aforesaid; thence with said common line North 39 degrees 51 minutes 07 seconds West 371.95 feet to an iron pin with identifier #2747 at its intersection with the southwest corner of property owned by Joseph Petroski, Jr. and Barbara Blackburn in Deed Book 7507, Page 987 in the office aforesaid; thence with the southeast line of same North 63 degrees 01 minute 00 seconds East 46.21 feet to an iron pin with identifier #2747 at the southwest corner of the tract conveyed to Steven and Peggy Wigley by deed of record in Deed Book 7301, Page 765 in the office aforesaid; thence with the southeast line of said Wigley tract North 49 degrees 10 minutes 10 seconds East 99.42 feet to an iron pin with identifier #2747 at its intersection with the southwesterly line of the tract conveyed to Jamestown of St. Matthews Co., II. (now known as Jamestown of St. Matthews Limited Partnership) tract aforesaid; thence with said southwesterly line South 30 degrees 48 minutes 00 seconds East 341.21 feet to the point of beginning, containing 0.94 acres.

The above description encompasses and describes the remainder portion of the property as referenced in deed of record in Deed Book 3981, Page 585 in the office of the Clerk of Jefferson County, Kentucky.

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Exhibit B

Seller Diligence Deliveries


1		Utility Account List (including names/addresses of utility companies; account numbers; contact names)
2		Utility billing program/detail for residents and vacant units
3		Current Rent Roll (PDF & Excel)
4		Tenant concession schedule
5		Real Estate Tax Bills for the Past Three Years
6		Property Financial and Operating Statements for 2011 (for portions of such year when the Property was owned by the Company), 2012, 2013 and YTD 2014 (PDF & Excel)
7		Property General Ledgers YTD and Past 3 Years (PDF & Excel)
8		Property Operating Budgets, if available
9		Capital Expenditure Summary for 2011 (for portions of such year when the Property was owned by the Company), 2012, 2013 and YTD 2014
10		Aged Payables and Receivables schedule
11		Payroll schedule
12		Property management contract
13		Current property, liability, rent loss and other insurance certificates
14		Insurance Claims History/Loss Runs for the Past Three Years
15		Bank statements for the past 12 months
16		Existing Vendor List (including name, address, phone number, and contact)
17		All Service and Operating Contracts and Invoices (including cable, trash & laundry if applicable)
18		List of Personal Property
19		Existing Tenant Leases and occupancy agreements to be made available on site
20		Leasing/Marketing Materials
21		Warranties, if any
22		Standard form of apartment lease
23		Intentionally Omitted
24		Construction Plan Drawings and Specification Books, to be made available on site, if any
25		Copies of permits and licenses related to or affecting the Property
26		Certificate of Occupancy, if any
27		Existing title policy and all documents and instruments referenced therein
28		Environmental reports prepared for the Seller, including asbestos and environmental audits and analyses
29		List of all pending or threatened litigation relating to Seller or the Property
30		Engineering reports, if available

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31		Most Recent ALTA/ACSM As-Built Survey
32		Master Lease, if any
33		Most Recent City and Fire Inspection Reports, if any
34		Site Plan
35		Construction Contracts for significant repairs within the last 24 months

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Exhibit C

Rent Roll

[Attached.]

-9-

Exhibit D

Form of Assignment and Assumption of Membership Interests

ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS

THIS ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS (this “ Assignment ”), is made as of , 2014 by and between , a (“ Assignor ”), and , a (“ Assignee ”).

W I T N E S S E T H:

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows:

1. Assignment . Assignor hereby assigns, sets over and transfers to Assignee all of Assignor’s right, title and interest in, to and under the Interests.

4. Withdrawal . Assignor hereby withdraws as a member of the Company, and Assignee is hereby substituted as the sole member of the Company.

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[SIGNATURE PAGE FOLLOWS]

-11-

IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the day and year first above written.


ASSIGNOR :		, a(n)


	By:

	Name:

	Title:

ASSIGNEE :		, a(n)


	By:

	Name:

	Title:

-12-

Exhibit E

Form of FIRPTA Affidavit

(a) [ ] (“ ”), is the indirect sole member of [ ], a Delaware limited liability company.

(b) [ ] is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); and

(d) [ ] address is [ ], Attention: President.

[ ] understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Dated: As of [ ], 2014.


By:
Name:
Title:

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Exhibit 10.23

Execution

MEADOWS

INTEREST PURCHASE AND SALE AGREEMENT

by and between

CRA-B1 FUND, LLC,

as Seller

and

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP,

as Purchaser

Dated as of October 20, 2014

Table of Contents


		Page

ARTICLE I. PURCHASE AND SALE			1

Section 1.1.	Agreement of Purchase and Sale.		1

Section 1.2.	Purchase Price.		1

Section 1.3	Purchase Price Allocation.		1

Section 1.4.	Payment of the Purchase Price.		2

Section 1.5.	Deposit.		2

Section 1.6.	Escrow Agent.		2

ARTICLE II. TITLE AND SURVEY; DUE DILIGENCE PERIOD			3

Section 2.1.	Seller Diligence Deliveries.		3

Section 2.2.	Title Review.		3

Section 2.3.	Due Diligence Period.		5

Section 2.4.	Right of Termination.		6

Section 2.5.	No Reliance.		6

Section 2.6.	As-Is, Where-Is.		7

Section 2.7.	Environmental Waiver and Release.		8

Section 2.8.	Survival.		8

ARTICLE III. REPRESENTATIONS, WARRANTIES AND COVENANTS			8

Section 3.1.	Representations and Warranties of Seller.		8

Section 3.2.	Seller’s Covenants.		13

Section 3.3.	Representations and Warranties of Purchaser.		14

Section 3.4.	Purchaser’s Covenants.		15

Section 3.5.	No Brokers.		15

Section 3.6.	Survival; Limitation on Liability of Seller Parties.		15

ARTICLE IV. CLOSING			16

Section 4.1.	Closing Date.		16

Section 4.2.	Closing Costs.		16

Section 4.3.	Conditions Precedent to the Obligations of Seller.		16

Section 4.4.	Conditions Precedent to the Obligations of Purchaser.		17

Section 4.5.	Credits and Prorations.		18

Section 4.6.	Seller’s Obligations at Closing.		20

Section 4.7.	Purchaser’s Obligations at Closing.		21

Section 4.8.	Application of Purchase Price to Monetary Liens at Closing.		22

ARTICLE V. RISK OF LOSS			22

Section 5.1.	Minor Damage.		22

Section 5.2.	Major Damage.		22

Table of Contents (continued)


		Page

ARTICLE VI. DEFAULT AND REMEDIES			23

Section 6.1.	Default by Seller; Purchaser’s Remedies.		23

Section 6.2.	Default by Purchaser; Seller’s Remedies.		23

Section 6.3.	Indemnification Obligations.		24

Section 6.4.	Limitation on Seller Parties’ Personal Liability.		24

ARTICLE VII. MISCELLANEOUS			25

Section 7.1.	Confidentiality.		25

Section 7.2.	Seller Confidentiality and Trading		26

Section 7.3.	Record Access and Retention.		26

Section 7.4.	Related Agreements.		26

Section 7.5.	Assignment.		27

Section 7.6.	Notices.		27

Section 7.7.	Modifications.		28

Section 7.8.	Entire Agreement.		28

Section 7.9.	Further Assurances.		28

Section 7.10.	Counterparts.		28

Section 7.11.	Electronic or Facsimile Signatures.		28

Section 7.12.	Severability.		29

Section 7.13.	Applicable Law.		29

Section 7.14.	No Third-Party Beneficiaries.		29

Section 7.15.	No Recordation.		29

Section 7.16.	Prevailing Party.		29

Section 7.17.	Computation of Time Periods.		29

Section 7.18.	Captions.		30

Section 7.19.	Construction.		30

Section 7.20.	Tax Matters		30

ARTICLE VIII. DEFINED TERMS			33

Section 8.1.	Defined Terms.		33

Table of Contents


	Page

List of Schedules and Exhibits

Schedule 1.3 – Allocation of Purchase Price		1
Schedule 2.2(c) – Alternate Title Insurance Companies		2
Schedule 3.1(o) – Brokerage Agreements		3
Schedule 3.1(x) – Company’s Organizational Documents		4

Exhibit A – Description of Land		5
Exhibit B – Seller Diligence Deliveries		6
Exhibit C – Rent Roll		8
Exhibit D – Form of Assignment and Assumption of Membership Interests		9
Exhibit E – Form of FIRPTA Affidavit		12

iii

INTEREST PURCHASE AND SALE AGREEMENT

RECITALS

A. Seller owns 100% of the limited liability company interests (the “ Interests ”) in Meadows CRA-B1, LLC, a Delaware limited liability company (the “ Company ”).

B. The Company owns the parcel of land located at 2204 Deercross Drive, Louisville, KY 40220 and described more particularly in Exhibit A attached hereto and made a part hereof, together with all rights and appurtenances pertaining to such property, including any right, title and interest of the Company in and to adjacent streets, alleys, easements or rights-of-way, together with any improvements thereon, but subject to the Permitted Exceptions (collectively, the “ Property ”).

C. Purchaser desires to purchase the Interests and Seller desires to sell the Interests to Purchaser, subject to the terms and provisions set forth herein.

AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:

ARTICLE I.

PURCHASE AND SALE

Section 1.2. Purchase Price . Seller agrees to sell and Purchaser agrees to purchase the Interests for the amount of $38,500,000 (the “ Purchase Price ”).

other filings consistent with the allocations set forth on Schedule 1.3 . The provisions of this Section 1.3 shall survive the Closing.

Section 1.5. Deposit . On or prior to 5:00 p.m. Eastern time on the third Business Day after the Effective Date, Purchaser shall deposit with Land Services USA, Inc. (the “ Escrow Agent ”) an amount equal to $236,923 (the “ Initial Deposit ”) in cash by wire transfer of immediately available federal funds, and failing which, Seller may terminate this Agreement by giving written notice to Purchaser. On or prior to the Expiration of the Due Diligence Period, unless Purchaser has terminated this Agreement pursuant to Section 2.4, Purchaser shall deposit with the Escrow Agent an amount equal to $236,923 (the “ Additional Deposit ”) in cash by wire transfer of immediately available federal funds, and failing which, Seller may terminate this Agreement by giving written notice to Purchaser. The Initial Deposit and the Additional Deposit, plus any interest accrued thereon, shall be collectively referred to herein as the “ Deposit ”. The Deposit shall be deemed to have been fully earned by Seller upon the execution and delivery of this Agreement and shall be non-refundable except (i) pursuant to Section 2.2(b), (ii) pursuant to Section 2.4, (iii) pursuant to Section 5.2 or (iv) in the event of a default hereunder by Seller and a termination of this Agreement by Purchaser under Section 6.1, and if the Closing occurs the Deposit shall be paid to Seller and credited against the Purchase Price at the Closing in accordance with the terms of Section 1.3. Until the Closing or earlier termination of this Agreement, the Escrow Agent shall hold the Deposit and all interest thereon and proceeds thereof subject to the terms of this Agreement.

Section 1.6. Escrow Agent .

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ARTICLE II.

TITLE AND SURVEY; DUE DILIGENCE PERIOD

Section 2.2. Title Review .

-3-

-4-

Section 2.3. Due Diligence Period .

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-6-

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patent construction defects or physical conditions, violations or any applicable laws and any and all other facts, omissions, events, circumstances or matters regarding the Property.

Section 2.8. Survival . The provisions of Sections 2.3, 2.4, 2.5, 2.6 and 2.7 and this Section 2.8 shall survive the Closing or any termination of this Agreement.

ARTICLE III.

REPRESENTATIONS, WARRANTIES AND COVENANTS

-8-

(h) Non-Foreign Entity . Seller is not a “foreign person” within the meaning of Section 1445(f) of the Internal Revenue Code of 1986, as amended.

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(j) ERISA . Seller is not a “benefit plan investor” within the meaning of and subject to the Employee Retirement Income Security Act of 1974, as amended.

(m) Condemnation . Seller has received no written notice of and has no knowledge of any pending or threatened condemnation proceedings relating to the Property.

(n) Title . There are no outstanding agreements, options, rights of first refusal or rights of first offer with respect to the purchase and sale of the Property other than this Agreement.

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(t) Employees . The Company has no employees.

-11-

References to the “knowledge” of Seller refer only to the current actual knowledge of David W. Snyder and Paul Priebe without any duty of inquiry or investigation and shall not be

-12-

Section 3.2. Seller’s Covenants .

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herein, “ Rent Ready Condition ” shall mean “made ready” and suitable for occupancy in accordance with the Company’s current standards.

(f) Delinquency Report . Seller shall provide Purchaser with a delinquency report on a monthly basis until Closing, listing all delinquent tenants by amount and time delinquent.

(c) Consents . No consent, waiver, approval or authorization is required from any person or entity (that has not already been obtained) in connection with the execution and delivery of this Agreement by Purchaser or the performance by Purchaser of the transactions contemplated hereby.

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Section 3.4. Purchaser’s Covenants . During the Contract Period, Purchaser shall observe all of the covenants and conditions applicable to Purchaser hereunder.

Section 3.6. Survival; Limitation on Liability of Seller Parties .

-15-

ARTICLE IV.

CLOSING

Section 4.3. Conditions Precedent to the Obligations of Seller . The obligation of Seller to consummate the transaction contemplated

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hereunder shall be subject to the fulfillment on or before the Closing Date of each of the following conditions, any or all of which may be waived by Seller in its sole discretion:

(d) Purchaser shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Purchaser as of the Closing Date; and

(e) the closing date under the Related Agreements shall be the same as the Closing Date hereunder, and the closing under the Related Agreements shall occur simultaneously with the Closing hereunder.

(c) Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Seller as of the Closing Date;

(d) Seller shall have paid off or caused to be removed any Monetary Liens or arranged for the payoff or removal of the same concurrent with the Closing pursuant to Section 4.8;

-17-

Section 4.5. Credits and Prorations .

-18-

be, shall make an appropriate payment to the other party based on such recalculation within 30 days after the parties agree on the recalculation.

-19-

Section 4.6. Seller’s Obligations at Closing . At Closing, Seller shall:

(d) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Seller;

-20-

(e) deliver to the Title Company an owner’s affidavit duly executed by the Company, in customary form reasonably acceptable to the Title Company;

(h) deliver an executed counterpart to the Closing Statement;

(k) deliver a schedule of Security Deposits currently held by Seller on behalf of the Tenants; and

(l) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement.

Section 4.7. Purchaser’s Obligations at Closing . At Closing, Purchaser shall:

(a) pay to Seller, in immediately available federal funds transferred by wire pursuant to Section 1.3, the full amount of the Purchase Price, subject to prorations and adjustments as provided herein;

(b) deliver to Seller an executed counterpart to the Assignment and Assumption of Membership Interests;

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(d) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Purchaser;

(e) deliver an executed counterpart to the Closing Statement; and

(f) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement.

ARTICLE V.

RISK OF LOSS

Section 5.2. Major Damage .

-22-

ARTICLE VI.

DEFAULT AND REMEDIES

Section 6.2. Default by Purchaser; Seller’s Remedies .

-23-

-24-

ARTICLE VII.

MISCELLANEOUS

Section 7.1. Confidentiality .

(d) The provisions of this Section 7.1 shall survive any termination of this Agreement or the Closing for a period of three (3) years.

-25-

Section 7.4. Related Agreements . Seller and Purchaser acknowledge that, simultaneously with the execution of this Agreement, Seller and Purchaser are entering into the

-26-


If to Seller:		Meadows CRA-B1, LLC
		c/o Continental Realty Advisors, Ltd.
		10579 W. Bradford Road, Suite 100
		Littleton, Colorado 80172
		Attn: David W. Snyder

with a copy to each of:		Hamil/Martin LLC
		140 East 19 ^th Avenue, Suite 600
		Denver, Colorado, 80203-1035
		Attn: Larry Hamil, Esq.

		Ropes & Gray LLP
		Prudential Tower
		800 Boylston Street
		Boston, Massachusetts 02199
		Attn: Marc D. Lazar, Esq.
		Telephone: (617) 951-7866

-27-


	Email: marc.lazar@ropesgray.com

If to Purchaser:	Independence Realty Operating Partnership, LP
	c/o RAIT Financial Trust
	Cira Centre
	2929 Arch Street, 17 ^th Floor
	Philadelphia, PA 19104
	Attention:	Farrell Ender
	Email:	fender@irtreit.com

with a copy to:

	RAIT Financial Trust
	2929 Arch Street, 17 ^th Floor
	Philadelphia, PA 19104
	Attention:	Jamie Reyle, Esquire
	Facsimile:	215.405.2945
	Email:	jreyle@raitft.com

Section 7.11. Electronic or Facsimile Signatures . In order to expedite

-28-

Section 7.13. Applicable Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Kentucky without giving effect to any conflict of laws principles.

-29-

notice may be timely performed or given on the next succeeding day which is not a Saturday, Sunday or national holiday.

Section 7.20. Tax Matters .

(b) Seller shall indemnify the Company and Purchaser and hold them harmless from and against without duplication, any loss, claim, liability, expense, or other damage attributable to (1) all Taxes (or the non-payment thereof) of the Company for all taxable periods ending on or before the Closing Date and the portion through the end of the Closing Date for any taxable period that includes (but does not end on) the Closing Date (“ Pre-Closing Tax Period ”)(determined in accordance with Section 7.20(c) below); and (2) any and all Taxes of any person (other than the Company) imposed on the Company as a transferee or successor, by

-30-

contract or pursuant to any similar law, rule or regulation for a Pre-Closing Tax Period (determined in accordance with Section 7.20(c) below).

(e) Purchaser and Seller covenant and agree to cooperate with each other regarding tax matters as follows:

(iii) Purchaser shall notify Seller in writing within ten (10) days after receipt by Purchaser or the Company of any determination of liability for Taxes from an official

-31-

(g) Except as expressly set forth in Section 7.20(e)(i), this Section 7.20 shall survive until the second anniversary of the Closing.

-32-

ARTICLE VIII.

DEFINED TERMS

Section 8.1. Defined Terms . Certain capitalized terms used in this Agreement will have the meanings set forth below or in the Section of this Agreement referred to below:

(a) “ Additional Deposit ” is defined in Section 1.5.

(b) “ Agreement ” is defined in the preamble to this Agreement.

(e) “ Closing ” is defined in Section 4.1.

(f) “ Closing Date ” is defined in Section 4.1.

(g) “ Closing Statement ” is defined in Section 4.5(a).

(h) “ Company ” is defined in the recitals to this Agreement.

(i) “ Contracts ” means all contracts and agreements relating to the upkeep, repair, maintenance or operation of the Property which will extend beyond the Closing Date.

(j) “ Contract Period ” is defined in Section 3.2(a).

(k) “ Deposit ” is defined in Section 1.5.

(l) “ Effective Date ” is defined in the preamble to this Agreement.

(m) “ Escrow Agent ” is defined in Section 1.5.

(n) “ Expiration of the Due Diligence Period ” is defined in Section 2.3(a).

(o) “ Final Closing Statement ” is defined in Section 4.5(g).

(p) “ Initial Deposit ” is defined in Section 1.5.

(q) “ Interests ” is defined in the recitals to this Agreement.

(r) “ Leases ” means the leases, licenses and occupancy agreements covering all or any portion of the Property to the extent they are in effect on the Closing Date.

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(v) “ Property ” is defined in the recitals to this Agreement.

(x) “ Purchase Price ” is defined in Section 1.2.

(y) “ Purchaser ” is defined in the preamble to this Agreement.

(z) “ Purchaser Closing Certificate ” is defined in Section 4.7(c).

(aa) “ Related Agreements ” means the Brookside Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, Jamestown Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, Oxmoor Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, and Prospect Park Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof.

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(bb) “ Released Parties ” is defined in Section 2.7.

(dd) “ Seller ” is defined in the preamble to this Agreement.

(ee) “ Seller Closing Certificate ” is defined in Section 4.6(c).

(ff) “ Seller Diligence Deliveries ” is defined in Section 2.1.

(gg) “ Seller Parties ” means Seller and the Company.

(hh) “ Survey ” is defined in Section 2.2(a).

(ii) “ Tenants ” means the tenants or occupants under the Leases.

(jj) “ Title Commitment ” is defined in Section 2.1(a).

(kk) “ Title Company ” is defined in Section 2.1(a).

(ll) “ Title Objections ” is defined in Section 2.2(b).

-35-

IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the Effective Date.


SELLER:

CRA-B1 FUND, LLC, a Delaware limited liability company

By:	Continental Realty Services, LLC,
	a Colorado limited liability company, its Manager

	By:	/s/ David W. Snyder
		Name:	David W. Snyder
		Title:	Manager

[Signature Page to Purchase and Sale Agreement - Meadows]


PURCHASER:

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP, a Delaware limited partnership

By:	Independence Realty Trust, Inc., and Maryland corporation

	By:	Independence Realty Advisors, LLC,
		a Delaware limited liability company, its external advisor

		By:	/s/ Farrell Ender
			Name:	Farrell Ender
			Title:	President

[Signature Page to Purchase and Sale Agreement - Meadows]

JOINDER BY ESCROW AGENT

Escrow Agent hereby executes this Agreement below solely for the purpose of acknowledging and agreeing to be bound by the provisions of Sections 1.5 and 1.6.


ESCROW AGENT:

LAND SERVICES USA, INC.

By:	/s/ Alison Zugschwert
	Name:	Alison Zugschwert
	Title:	Title Officer

[Signature Page to Purchase and Sale Agreement - Meadows]

Schedule 1.3

Allocation of Purchase Price


	Allocations
Real Property	$	37,922,500
Personal Property	$	577,500

Total Purchase Price	$	38,500,000

-1-

Schedule 2.2(c)

Alternate Title Insurance Companies

Chicago Title Insurance Company

Commonwealth Land Title Insurance Company

Fidelity National Title Insurance Company

Old Republic National Title Insurance Company

Stewart Title Guaranty Company

-2-

Schedule 3.1(o)

Brokerage Agreements

1.	Exclusive Sales Listing Agreement, dated as of April 1, 2014, by and between CBRE Inc. and Meadows CRA-B1, LLC, as amended by the Amendment to Listing Agreement, dated as of July 22, 2014.

-3-

Schedule 3.1(x)

Organizational Documents of the Company

1.	Certificate of Formation of Meadows CRA-B1, LLC dated as of October 19, 2011 and filed with the Secretary of State of the State of Delaware on October 20, 2011.

2.	First Amended Limited Liability Company Agreement of Meadows CRA-B1, LLC dated as of November 23, 2011.

-4-

Exhibit A

Description of Land

Tract 1: Being Lots 1 and 3, of the subdivision plat of Deerfield Apartments, according to the plat recorded in Plat and Subdivision Book 36, Page 25, in the office of the Clerk of Jefferson County, Kentucky.

Tract 2: Being Lot 2 of the subdivision plat of Deerfield Apartments, according to the plat recorded in Plat and Subdivision Book 36, Page 25, in the office of the Clerk of Jefferson County, Kentucky.

Tax Data:

ID No. 22-2293-0001-0000

ID No. 22-2293-0002-0000

ID No. 22-2293-0003-0000

-5-

Exhibit B

Seller Diligence Deliveries


1		Utility Account List (including names/addresses of utility companies; account numbers; contact names)
2		Utility billing program/detail for residents and vacant units
3		Current Rent Roll (PDF & Excel)
4		Tenant concession schedule
5		Real Estate Tax Bills for the Past Three Years
6		Property Financial and Operating Statements for 2011 (for portions of such year when the Property was owned by the Company), 2012, 2013 and YTD 2014 (PDF & Excel)
7		Property General Ledgers YTD and Past 3 Years (PDF & Excel)
8		Property Operating Budgets, if available
9		Capital Expenditure Summary for 2011 (for portions of such year when the Property was owned by the Company), 2012, 2013 and YTD 2014
10		Aged Payables and Receivables schedule
11		Payroll schedule
12		Property management contract
13		Current property, liability, rent loss and other insurance certificates
14		Insurance Claims History/Loss Runs for the Past Three Years
15		Bank statements for the past 12 months
16		Existing Vendor List (including name, address, phone number, and contact)
17		All Service and Operating Contracts and Invoices (including cable, trash & laundry if applicable)
18		List of Personal Property
19		Existing Tenant Leases and occupancy agreements to be made available on site
20		Leasing/Marketing Materials
21		Warranties, if any
22		Standard form of apartment lease
23		Intentionally Omitted
24		Construction Plan Drawings and Specification Books, to be made available on site, if any
25		Copies of permits and licenses related to or affecting the Property
26		Certificate of Occupancy, if any
27		Existing title policy and all documents and instruments referenced therein
28		Environmental reports prepared for the Seller, including asbestos and environmental audits and analyses
29		List of all pending or threatened litigation relating to Seller or the Property
30		Engineering reports, if available

-6-


31		Most Recent ALTA/ACSM As-Built Survey
32		Master Lease, if any
33		Most Recent City and Fire Inspection Reports, if any
34		Site Plan
35		Construction Contracts for significant repairs within the last 24 months

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Exhibit C

Rent Roll

[Attached.]

-8-

Exhibit D

Form of Assignment and Assumption of Membership Interests

ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS

THIS ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS (this “ Assignment ”), is made as of , 2014 by and between , a (“ Assignor ”), and , a (“ Assignee ”).

W I T N E S S E T H:

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows:

1. Assignment . Assignor hereby assigns, sets over and transfers to Assignee all of Assignor’s right, title and interest in, to and under the Interests.

4. Withdrawal . Assignor hereby withdraws as a member of the Company, and Assignee is hereby substituted as the sole member of the Company.

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[SIGNATURE PAGE FOLLOWS]

-10-

IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the day and year first above written.


ASSIGNOR :		, a(n)


	By:

	Name:

	Title:

ASSIGNEE :		, a(n)


	By:

	Name:

	Title:

-11-

Exhibit E

Form of FIRPTA Affidavit

(a) [ ] (“ ”), is the indirect sole member of [ ], a Delaware limited liability company.

(b) [ ] is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); and

(d) [ ] address is [ ], Attention: President.

[ ] understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Dated: As of [ ], 2014.


By:
Name:
Title:

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Exhibit 10.24

Execution

OXMOOR

INTEREST PURCHASE AND SALE AGREEMENT

by and between

CRA-B1 FUND, LLC,

as Seller

and

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP,

as Purchaser

Dated as of October 20, 2014

Table of Contents


		Page

ARTICLE I. PURCHASE AND SALE			1

Section 1.1.	Agreement of Purchase and Sale.		1

Section 1.2.	Purchase Price.		1

Section 1.3.	Purchase Price Allocation.		1

Section 1.4.	Payment of the Purchase Price.		2

Section 1.5.	Deposit.		2

Section 1.6.	Escrow Agent.		2

ARTICLE II. TITLE AND SURVEY; DUE DILIGENCE PERIOD			3

Section 2.1.	Seller Diligence Deliveries.		3

Section 2.2.	Title Review.		3

Section 2.3.	Due Diligence Period.		5

Section 2.4.	Right of Termination.		6

Section 2.5.	No Reliance.		6

Section 2.6.	As-Is, Where-Is.		7

Section 2.7.	Environmental Waiver and Release.		8

Section 2.8.	Survival.		8

ARTICLE III. REPRESENTATIONS, WARRANTIES AND COVENANTS			8

Section 3.1.	Representations and Warranties of Seller.		8

Section 3.2.	Seller’s Covenants.		13

Section 3.3.	Representations and Warranties of Purchaser.		14

Section 3.4.	Purchaser’s Covenants.		15

Section 3.5.	No Brokers.		15

Section 3.6.	Survival; Limitation on Liability of Seller Parties.		15

ARTICLE IV. CLOSING			16

Section 4.1.	Closing Date.		16

Section 4.2.	Closing Costs.		16

Section 4.3.	Conditions Precedent to the Obligations of Seller.		16

Section 4.4.	Conditions Precedent to the Obligations of Purchaser.		17

Section 4.5.	Credits and Prorations.		18

Section 4.6.	Seller’s Obligations at Closing.		20

Section 4.7.	Purchaser’s Obligations at Closing.		21

Section 4.8.	Application of Purchase Price to Monetary Liens at Closing.		22

ARTICLE V. RISK OF LOSS			22

Section 5.1.	Minor Damage.		22

Section 5.2.	Major Damage.		22

Table of Contents (continued)


		Page

ARTICLE VI. DEFAULT AND REMEDIES			23

Section 6.1.	Default by Seller; Purchaser’s Remedies.		23

Section 6.2.	Default by Purchaser; Seller’s Remedies.		23

Section 6.3.	Indemnification Obligations.		24

Section 6.4.	Limitation on Seller Parties’ Personal Liability.		24

ARTICLE VII. MISCELLANEOUS			25

Section 7.1.	Confidentiality.		25

Section 7.2.	Seller Confidentiality and Trading.		26

Section 7.3.	Record Access and Retention.		26

Section 7.4.	Related Agreements.		26

Section 7.5.	Assignment.		27

Section 7.6.	Notices.		27

Section 7.7.	Modifications.		28

Section 7.8.	Entire Agreement.		28

Section 7.9.	Further Assurances.		28

Section 7.10.	Counterparts.		28

Section 7.11.	Electronic or Facsimile Signatures.		28

Section 7.12.	Severability.		29

Section 7.13.	Applicable Law.		29

Section 7.14.	No Third-Party Beneficiaries.		29

Section 7.15.	No Recordation.		29

Section 7.16.	Prevailing Party.		29

Section 7.17.	Computation of Time Periods.		29

Section 7.18.	Captions.		30

Section 7.19.	Construction.		30

Section 7.20.	Tax Matters.		30

ARTICLE VIII. DEFINED TERMS			33

Section 8.1.	Defined Terms.		33

Table of Contents


	Page

List of Schedules and Exhibits

Schedule 1.3 – Allocation of Purchase Price		1
Schedule 2.2(c) – Alternate Title Insurance Companies		2
Schedule 3.1(o) – Brokerage Agreements		3
Schedule 3.1(x) – Company’s Organizational Documents		4

Exhibit A – Description of Land		5
Exhibit B – Seller Diligence Deliveries		6
Exhibit C – Rent Roll		8
Exhibit D – Form of Assignment and Assumption of Membership Interests		9
Exhibit E – Form of FIRPTA Affidavit		12

iii

INTEREST PURCHASE AND SALE AGREEMENT

RECITALS

A. Seller owns 100% of the limited liability company interests (the “ Interests ”) in Oxmoor CRA-B1, LLC, a Delaware limited liability company (the “ Company ”).

B. The Company owns the parcel of land located at 7400 Steeplecrest Circle, Louisville, KY 40222 and described more particularly in Exhibit A attached hereto and made a part hereof, together with all rights and appurtenances pertaining to such property, including any right, title and interest of the Company in and to adjacent streets, alleys, easements or rights-of-way, together with any improvements thereon, but subject to the Permitted Exceptions (collectively, the “ Property ”).

C. Purchaser desires to purchase the Interests and Seller desires to sell the Interests to Purchaser, subject to the terms and provisions set forth herein.

AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:

ARTICLE I.

PURCHASE AND SALE

Section 1.2. Purchase Price . Seller agrees to sell and Purchaser agrees to purchase the Interests for the amount of $55,000,000 (the “ Purchase Price ”).

other filings consistent with the allocations set forth on Schedule 1.3 . The provisions of this Section 1.3 shall survive the Closing.

Section 1.5. Deposit . On or prior to 5:00 p.m. Eastern time on the third Business Day after the Effective Date, Purchaser shall deposit with Land Services USA, Inc. (the “ Escrow Agent ”) an amount equal to $338,461 (the “ Initial Deposit ”) in cash by wire transfer of immediately available federal funds, and failing which, Seller may terminate this Agreement by giving written notice to Purchaser. On or prior to the Expiration of the Due Diligence Period, unless Purchaser has terminated this Agreement pursuant to Section 2.4, Purchaser shall deposit with the Escrow Agent an amount equal to $338,461 (the “ Additional Deposit ”) in cash by wire transfer of immediately available federal funds, and failing which, Seller may terminate this Agreement by giving written notice to Purchaser. The Initial Deposit and the Additional Deposit, plus any interest accrued thereon, shall be collectively referred to herein as the “ Deposit ”. The Deposit shall be deemed to have been fully earned by Seller upon the execution and delivery of this Agreement and shall be non-refundable except (i) pursuant to Section 2.2(b), (ii) pursuant to Section 2.4, (iii) pursuant to Section 5.2 or (iv) in the event of a default hereunder by Seller and a termination of this Agreement by Purchaser under Section 6.1, and if the Closing occurs the Deposit shall be paid to Seller and credited against the Purchase Price at the Closing in accordance with the terms of Section 1.3. Until the Closing or earlier termination of this Agreement, the Escrow Agent shall hold the Deposit and all interest thereon and proceeds thereof subject to the terms of this Agreement.

Section 1.6. Escrow Agent .

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ARTICLE II.

TITLE AND SURVEY; DUE DILIGENCE PERIOD

Section 2.2. Title Review .

-3-

-4-

Section 2.3. Due Diligence Period .

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-6-

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patent construction defects or physical conditions, violations or any applicable laws and any and all other facts, omissions, events, circumstances or matters regarding the Property.

Section 2.8. Survival . The provisions of Sections 2.3, 2.4, 2.5, 2.6 and 2.7 and this Section 2.8 shall survive the Closing or any termination of this Agreement.

ARTICLE III.

REPRESENTATIONS, WARRANTIES AND COVENANTS

-8-

(h) Non-Foreign Entity . Seller is not a “foreign person” within the meaning of Section 1445(f) of the Internal Revenue Code of 1986, as amended.

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(j) ERISA . Seller is not a “benefit plan investor” within the meaning of and subject to the Employee Retirement Income Security Act of 1974, as amended.

(m) Condemnation . Seller has received no written notice of and has no knowledge of any pending or threatened condemnation proceedings relating to the Property.

(n) Title . There are no outstanding agreements, options, rights of first refusal or rights of first offer with respect to the purchase and sale of the Property other than this Agreement.

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(t) Employees . The Company has no employees.

-11-

References to the “knowledge” of Seller refer only to the current actual knowledge of David W. Snyder and Paul Priebe without any duty of inquiry or investigation and shall not be

-12-

Section 3.2. Seller’s Covenants .

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herein, “ Rent Ready Condition ” shall mean “made ready” and suitable for occupancy in accordance with the Company’s current standards.

(f) Delinquency Report . Seller shall provide Purchaser with a delinquency report on a monthly basis until Closing, listing all delinquent tenants by amount and time delinquent.

(c) Consents . No consent, waiver, approval or authorization is required from any person or entity (that has not already been obtained) in connection with the execution and delivery of this Agreement by Purchaser or the performance by Purchaser of the transactions contemplated hereby.

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Section 3.4. Purchaser’s Covenants . During the Contract Period, Purchaser shall observe all of the covenants and conditions applicable to Purchaser hereunder.

Section 3.6. Survival; Limitation on Liability of Seller Parties .

-15-

ARTICLE IV.

CLOSING

Section 4.3. Conditions Precedent to the Obligations of Seller . The obligation of Seller to consummate the transaction contemplated

-16-

hereunder shall be subject to the fulfillment on or before the Closing Date of each of the following conditions, any or all of which may be waived by Seller in its sole discretion:

(d) Purchaser shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Purchaser as of the Closing Date; and

(e) the closing date under the Related Agreements shall be the same as the Closing Date hereunder, and the closing under the Related Agreements shall occur simultaneously with the Closing hereunder.

(c) Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Seller as of the Closing Date;

(d) Seller shall have paid off or caused to be removed any Monetary Liens or arranged for the payoff or removal of the same concurrent with the Closing pursuant to Section 4.8;

-17-

Section 4.5. Credits and Prorations .

-18-

be, shall make an appropriate payment to the other party based on such recalculation within 30 days after the parties agree on the recalculation.

-19-

Section 4.6. Seller’s Obligations at Closing . At Closing, Seller shall:

(d) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Seller;

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(e) deliver to the Title Company an owner’s affidavit duly executed by the Company, in customary form reasonably acceptable to the Title Company;

(h) deliver an executed counterpart to the Closing Statement;

(k) deliver a schedule of Security Deposits currently held by Seller on behalf of the Tenants; and

(l) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement.

Section 4.7. Purchaser’s Obligations at Closing . At Closing, Purchaser shall:

(a) pay to Seller, in immediately available federal funds transferred by wire pursuant to Section 1.3, the full amount of the Purchase Price, subject to prorations and adjustments as provided herein;

(b) deliver to Seller an executed counterpart to the Assignment and Assumption of Membership Interests;

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(d) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Purchaser;

(e) deliver an executed counterpart to the Closing Statement; and

(f) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement.

ARTICLE V.

RISK OF LOSS

Section 5.2. Major Damage .

-22-

ARTICLE VI.

DEFAULT AND REMEDIES

Section 6.2. Default by Purchaser; Seller’s Remedies .

-23-

-24-

ARTICLE VII.

MISCELLANEOUS

Section 7.1. Confidentiality .

(d) The provisions of this Section 7.1 shall survive any termination of this Agreement or the Closing for a period of three (3) years.

-25-

Section 7.4. Related Agreements . Seller and Purchaser acknowledge that, simultaneously with the execution of this Agreement, Seller and Purchaser are entering into the

-26-


If to Seller:		Oxmoor CRA-B1, LLC
		c/o Continental Realty Advisors, Ltd.
		10579 W. Bradford Road, Suite 100
		Littleton, Colorado 80172
		Attn: David W. Snyder

with a copy to each of:		Hamil/Martin LLC
		140 East 19 ^th Avenue, Suite 600
		Denver, Colorado, 80203-1035
		Attn: Larry Hamil, Esq.

		Ropes & Gray LLP
		Prudential Tower
		800 Boylston Street
		Boston, Massachusetts 02199
		Attn: Marc D. Lazar, Esq.
		Telephone: (617) 951-7866

-27-


	Email: marc.lazar@ropesgray.com

If to Purchaser:	Independence Realty Operating Partnership, LP
	c/o RAIT Financial Trust
	Cira Centre
	2929 Arch Street, 17 ^th Floor
	Philadelphia, PA 19104
	Attention:	Farrell Ender
	Email:	fender@irtreit.com

with a copy to:

	RAIT Financial Trust
	2929 Arch Street, 17 ^th Floor
	Philadelphia, PA 19104
	Attention:	Jamie Reyle, Esquire
	Facsimile:	215.405.2945
	Email:	jreyle@raitft.com

Section 7.11. Electronic or Facsimile Signatures . In order to expedite

-28-

Section 7.13. Applicable Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Kentucky without giving effect to any conflict of laws principles.

-29-

notice may be timely performed or given on the next succeeding day which is not a Saturday, Sunday or national holiday.

Section 7.20. Tax Matters .

(b) Seller shall indemnify the Company and Purchaser and hold them harmless from and against without duplication, any loss, claim, liability, expense, or other damage attributable to (1) all Taxes (or the non-payment thereof) of the Company for all taxable periods ending on or before the Closing Date and the portion through the end of the Closing Date for any taxable period that includes (but does not end on) the Closing Date (“ Pre-Closing Tax Period ”)(determined in accordance with Section 7.20(c) below); and (2) any and all Taxes of any person (other than the Company) imposed on the Company as a transferee or successor, by

-30-

contract or pursuant to any similar law, rule or regulation for a Pre-Closing Tax Period (determined in accordance with Section 7.20(c) below).

(e) Purchaser and Seller covenant and agree to cooperate with each other regarding tax matters as follows:

(iii) Purchaser shall notify Seller in writing within ten (10) days after receipt by Purchaser or the Company of any determination of liability for Taxes from an official

-31-

(g) Except as expressly set forth in Section 7.20(e)(i), this Section 7.20 shall survive until the second anniversary of the Closing.

-32-

ARTICLE VIII.

DEFINED TERMS

Section 8.1. Defined Terms . Certain capitalized terms used in this Agreement will have the meanings set forth below or in the Section of this Agreement referred to below:

(a) “ Additional Deposit ” is defined in Section 1.5.

(b) “ Agreement ” is defined in the preamble to this Agreement.

(e) “ Closing ” is defined in Section 4.1.

(f) “ Closing Date ” is defined in Section 4.1.

(g) “ Closing Statement ” is defined in Section 4.5(a).

(h) “ Company ” is defined in the recitals to this Agreement.

(i) “ Contracts ” means all contracts and agreements relating to the upkeep, repair, maintenance or operation of the Property which will extend beyond the Closing Date.

(j) “ Contract Period ” is defined in Section 3.2(a).

(k) “ Deposit ” is defined in Section 1.5.

(l) “ Effective Date ” is defined in the preamble to this Agreement.

(m) “ Escrow Agent ” is defined in Section 1.5.

(n) “ Expiration of the Due Diligence Period ” is defined in Section 2.3(a).

(o) “ Final Closing Statement ” is defined in Section 4.5(g).

(p) “ Initial Deposit ” is defined in Section 1.5.

(q) “ Interests ” is defined in the recitals to this Agreement.

(r) “ Leases ” means the leases, licenses and occupancy agreements covering all or any portion of the Property to the extent they are in effect on the Closing Date.

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(v) “ Property ” is defined in the recitals to this Agreement.

(x) “ Purchase Price ” is defined in Section 1.2.

(y) “ Purchaser ” is defined in the preamble to this Agreement.

(z) “ Purchaser Closing Certificate ” is defined in Section 4.7(c).

(aa) “ Related Agreements ” means the Brookside Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, Jamestown Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, Meadows Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, and Prospect Park Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof.

-34-

(bb) “ Released Parties ” is defined in Section 2.7.

(dd) “ Seller ” is defined in the preamble to this Agreement.

(ee) “ Seller Closing Certificate ” is defined in Section 4.6(c).

(ff) “ Seller Diligence Deliveries ” is defined in Section 2.1.

(gg) “ Seller Parties ” means Seller and the Company.

(hh) “ Survey ” is defined in Section 2.2(a).

(ii) “ Tenants ” means the tenants or occupants under the Leases.

(jj) “ Title Commitment ” is defined in Section 2.1(a).

(kk) “ Title Company ” is defined in Section 2.1(a).

(ll) “ Title Objections ” is defined in Section 2.2(b).

-35-

IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the Effective Date.


SELLER:

CRA-B1 FUND, LLC, a Delaware limited liability company

By:	Continental Realty Services, LLC,
	a Colorado limited liability company,
	its Manager

	By:	/s/ David W. Snyder
		Name:	David W. Snyder
		Title:	Manager

[Signature Page to Purchase and Sale Agreement - Oxmoor]


PURCHASER:

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP, a Delaware limited partnership

By:	Independence Realty Trust, Inc., and Maryland corporation

	By:	Independence Realty Advisors, LLC, a Delaware limited liability company, its external advisor

		By:	/s/ Farrell Ender
			Name:	Farrell Ender
			Title:	President

[Signature Page to Purchase and Sale Agreement - Oxmoor]

JOINDER BY ESCROW AGENT

Escrow Agent hereby executes this Agreement below solely for the purpose of acknowledging and agreeing to be bound by the provisions of Sections 1.5 and 1.6.


ESCROW AGENT:

LAND SERVICES USA, INC.

By:	/s/ Alison Zugschwert
	Name:	Alison Zugschwert
	Title:	Title Officer

[Signature Page to Purchase and Sale Agreement - Oxmoor]

Schedule 1.3

Allocation of Purchase Price


	Allocations
Real Property	$	54,175,000
Personal Property	$	825,000

Total Purchase Price	$	55,000,000

-1-

Schedule 2.2(c)

Alternate Title Insurance Companies

Chicago Title Insurance Company

Commonwealth Land Title Insurance Company

Fidelity National Title Insurance Company

Old Republic National Title Insurance Company

Stewart Title Guaranty Company

-2-

Schedule 3.1(o)

Brokerage Agreements

1.	Exclusive Sales Listing Agreement, dated as of April 1, 2014, by and between CBRE Inc. and Oxmoor CRA-B1, LLC, as amended by the Amendment to Listing Agreement, dated as of July 22, 2014.

-3-

Schedule 3.1(x)

Organizational Documents of the Company

1.	Certificate of Formation of Oxmoor CRA-B1, LLC dated as of November 8, 2011 and filed with the Secretary of State of the State of Delaware on November 9, 2011.

2.	First Amended Limited Liability Company Agreement of Oxmoor CRA-B1, LLC dated as of December 10, 2011.

-4-

Exhibit A

Description of Land

Tract I:

All of Tract 1 according to the Record Plat for The Park at Oxmoor, recorded at Plat Book 44, Page 5, Office of the Jefferson County Clerk for Jefferson County, Kentucky, and more particularly described as follows:

Being a portion of the tract conveyed to Alice A. Boden, Nancy Branch and Philip Arterburn as recorded in Deed Book 3741, Page 370 in the office of the County Court Clerk of Jefferson County, Kentucky and more particularly described as follows:

Beginning at an existing stone in the southeasterly corner of the tract conveyed to Alice A. Boden, Nancy Branch, and Philip Arterburn as recorded in Deed Book 3741, Page 370 in the aforementioned clerk’s office; thence South 57°00’24” West, 114.09 feet to the “true point of beginning”; thence South 57°00’24” West, 454.08 feet to a point; thence South 56°21’38” West, 573.61 feet to a point; thence North 33°31’27” West, 112.31 feet to a point; thence with the arc of a curve to the right with a radius of 1400.00 feet and a chord of North 25°07’53” West, 408.67 feet to a point; thence with the arc of a curve to the right with a radius of 1400.00 feet and a chord of North 08°20’47” West, 408.67 feet to a point; thence North 00°02’46” East, 5.17 feet to a point; thence with the arc of a curve to the right with a radius of 650.00 feet and a chord of North 23°40’56” East, 521.20 feet to a point; thence North 47°19’05” East, 5.91 feet to a point; thence with the arc of a curve to the left with a radius of 300.00 feet and a chord of North 31°08’58” East, 167.08 feet to a point; thence North 14°58’50” East, 11.08 feet to a point in the Southern right-of-way of Bunsen Parkway as recorded in the aforementioned clerk’s office in Plat Book 44 Page 5; thence with said right-of-way South 77°25’04” East, 151.24 feet to a point; thence with the arc of a curve to the right with a radius of 775.00 feet and a chord of South 54°32’53” East, 602.39 feet to a point; thence South 31°40’42” East, 150.05 feet to a point; thence with the arc of a curve to the right with a radius of 900.00 feet and a chord of South 17°05’56” East, 453.10 feet to the “true point of beginning” containing 26.101 acres, more or less.

Easement Parcels:

Together with easements for sewer and drainage establised by the Record Plat of The Park at Oxmoor recorded in Plat and Subdivision Book 44, Page 5, in the Office of the Clerk of Jefferson County, Kentucky (the “Plat”) which are located on Tracts 2 and 4 of the Plat.

-5-

Exhibit B

Seller Diligence Deliveries


1		Utility Account List (including names/addresses of utility companies; account numbers; contact names)
2		Utility billing program/detail for residents and vacant units
3		Current Rent Roll (PDF & Excel)
4		Tenant concession schedule
5		Real Estate Tax Bills for the Past Three Years
6		Property Financial and Operating Statements for 2011 (for portions of such year when the Property was owned by the Company), 2012, 2013 and YTD 2014 (PDF & Excel)
7		Property General Ledgers YTD and Past 3 Years (PDF & Excel)
8		Property Operating Budgets, if available
9		Capital Expenditure Summary for 2011 (for portions of such year when the Property was owned by the Company), 2012, 2013 and YTD 2014
10		Aged Payables and Receivables schedule
11		Payroll schedule
12		Property management contract
13		Current property, liability, rent loss and other insurance certificates
14		Insurance Claims History/Loss Runs for the Past Three Years
15		Bank statements for the past 12 months
16		Existing Vendor List (including name, address, phone number, and contact)
17		All Service and Operating Contracts and Invoices (including cable, trash & laundry if applicable)
18		List of Personal Property
19		Existing Tenant Leases and occupancy agreements to be made available on site
20		Leasing/Marketing Materials
21		Warranties, if any
22		Standard form of apartment lease
23		Intentionally Omitted
24		Construction Plan Drawings and Specification Books, to be made available on site, if any
25		Copies of permits and licenses related to or affecting the Property
26		Certificate of Occupancy, if any
27		Existing title policy and all documents and instruments referenced therein
28		Environmental reports prepared for the Seller, including asbestos and environmental audits and analyses
29		List of all pending or threatened litigation relating to Seller or the Property
30		Engineering reports, if available

-6-


31		Most Recent ALTA/ACSM As-Built Survey
32		Master Lease, if any
33		Most Recent City and Fire Inspection Reports, if any
34		Site Plan
35		Construction Contracts for significant repairs within the last 24 months

-7-

Exhibit C

Rent Roll

[Attached.]

-8-

Exhibit D

Form of Assignment and Assumption of Membership Interests

ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS

THIS ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS (this “ Assignment ”), is made as of , 2014 by and between , a (“ Assignor ”), and , a (“ Assignee ”).

W I T N E S S E T H:

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows:

1. Assignment . Assignor hereby assigns, sets over and transfers to Assignee all of Assignor’s right, title and interest in, to and under the Interests.

4. Withdrawal . Assignor hereby withdraws as a member of the Company, and Assignee is hereby substituted as the sole member of the Company.

-9-

[SIGNATURE PAGE FOLLOWS]

-10-

IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the day and year first above written.


ASSIGNOR :		, a(n)


	By:

	Name:

	Title:

ASSIGNEE :		, a(n)


	By:

	Name:

	Title:

-11-

Exhibit E

Form of FIRPTA Affidavit

(a) [ ] (“ ”), is the indirect sole member of [ ], a Delaware limited liability company.

(b) [ ] is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); and

(d) [ ] address is [ ], Attention: President.

[ ] understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Dated: As of [ ], 2014.


By:
Name:
Title:

-12-

Exhibit 10.25

Execution

PROSPECT PARK

INTEREST PURCHASE AND SALE AGREEMENT

by and between

CRA-B1 FUND, LLC,

as Seller

and

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP,

as Purchaser

Dated as of October 20, 2014

Table of Contents


		Page

ARTICLE I. PURCHASE AND SALE			1

Section 1.1.	Agreement of Purchase and Sale.		1

Section 1.2.	Purchase Price.		1

Section 1.3.	Purchase Price Allocation.		1

Section 1.4.	Payment of the Purchase Price.		2

Section 1.5.	Deposit.		2

Section 1.6.	Escrow Agent.		2

ARTICLE II. TITLE AND SURVEY; DUE DILIGENCE PERIOD			3

Section 2.1.	Seller Diligence Deliveries.		3

Section 2.2.	Title Review.		3

Section 2.3.	Due Diligence Period.		5

Section 2.4.	Right of Termination.		6

Section 2.5.	No Reliance.		6

Section 2.6.	As-Is, Where-Is.		7

Section 2.7.	Environmental Waiver and Release.		8

Section 2.8.	Survival.		8

ARTICLE III. REPRESENTATIONS, WARRANTIES AND COVENANTS			8

Section 3.1.	Representations and Warranties of Seller.		8

Section 3.2.	Seller’s Covenants.		13

Section 3.3.	Representations and Warranties of Purchaser.		14

Section 3.4.	Purchaser’s Covenants.		15

Section 3.5.	No Brokers.		15

Section 3.6.	Survival; Limitation on Liability of Seller Parties.		15

ARTICLE IV. CLOSING			16

Section 4.1.	Closing Date.		16

Section 4.2.	Closing Costs.		16

Section 4.3.	Conditions Precedent to the Obligations of Seller.		16

Section 4.4.	Conditions Precedent to the Obligations of Purchaser.		17

Section 4.5.	Credits and Prorations.		18

Section 4.6.	Seller’s Obligations at Closing.		20

Section 4.7.	Purchaser’s Obligations at Closing.		21

Section 4.8.	Application of Purchase Price to Monetary Liens at Closing.		22

ARTICLE V. RISK OF LOSS			22

Section 5.1.	Minor Damage.		22

Section 5.2.	Major Damage.		22

Table of Contents (continued)


		Page

ARTICLE VI. DEFAULT AND REMEDIES			23

Section 6.1.	Default by Seller; Purchaser’s Remedies.		23

Section 6.2.	Default by Purchaser; Seller’s Remedies.		23

Section 6.3.	Indemnification Obligations.		24

Section 6.4.	Limitation on Seller Parties’ Personal Liability.		24

ARTICLE VII. MISCELLANEOUS			25

Section 7.1.	Confidentiality.		25

Section 7.2.	Seller Confidentiality and Trading.		26

Section 7.3.	Record Access and Retention.		26

Section 7.4.	Related Agreements.		26

Section 7.5.	Assignment.		27

Section 7.6.	Notices.		27

Section 7.7.	Modifications.		28

Section 7.8.	Entire Agreement.		28

Section 7.9.	Further Assurances.		28

Section 7.10.	Counterparts.		28

Section 7.11.	Electronic or Facsimile Signatures.		28

Section 7.12.	Severability.		29

Section 7.13.	Applicable Law.		29

Section 7.14.	No Third-Party Beneficiaries.		29

Section 7.15.	No Recordation.		29

Section 7.16.	Prevailing Party.		29

Section 7.17.	Computation of Time Periods.		29

Section 7.18.	Captions.		30

Section 7.19.	Construction.		30

Section 7.20.	Tax Matters.		30

ARTICLE VIII. DEFINED TERMS			33

Section 8.1.	Defined Terms.		33

Table of Contents


	Page

List of Schedules and Exhibits

Schedule 1.3 – Allocation of Purchase Price		1
Schedule 2.2(c) – Alternate Title Insurance Companies		2
Schedule 3.1(o) – Brokerage Agreements		3
Schedule 3.1(x) – Company’s Organizational Documents		4

Exhibit A – Description of Land		5
Exhibit B – Seller Diligence Deliveries		6
Exhibit C – Rent Roll		8
Exhibit D – Form of Assignment and Assumption of Membership Interests		9
Exhibit E – Form of FIRPTA Affidavit		12

iii

INTEREST PURCHASE AND SALE AGREEMENT

RECITALS

A. Seller owns 100% of the limited liability company interests (the “ Interests ”) in Prospect Park CRA-B1, LLC, a Delaware limited liability company (the “ Company ”).

B. The Company owns the parcel of land located at 2300 Glen Eagle Drive, Louisville, KY 40222, and described more particularly in Exhibit A attached hereto and made a part hereof, together with all rights and appurtenances pertaining to such property, including any right, title and interest of the Company in and to adjacent streets, alleys, easements or rights-of-way, together with any improvements thereon, but subject to the Permitted Exceptions (collectively, the “ Property ”).

C. Purchaser desires to purchase the Interests and Seller desires to sell the Interests to Purchaser, subject to the terms and provisions set forth herein.

AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:

ARTICLE I.

PURCHASE AND SALE

Section 1.2. Purchase Price . Seller agrees to sell and Purchaser agrees to purchase the Interests for the amount of $14,000,000. (the “ Purchase Price ”).

other filings consistent with the allocations set forth on Schedule 1.3 . The provisions of this Section 1.3 shall survive the Closing.

Section 1.5. Deposit . On or prior to 5:00 p.m. Eastern time on the third Business Day after the Effective Date, Purchaser shall deposit with Land Services USA, Inc. (the “ Escrow Agent ”) an amount equal to $86,154 (the “ Initial Deposit ”) in cash by wire transfer of immediately available federal funds, and failing which, Seller may terminate this Agreement by giving written notice to Purchaser. On or prior to the Expiration of the Due Diligence Period, unless Purchaser has terminated this Agreement pursuant to Section 2.4, Purchaser shall deposit with the Escrow Agent an amount equal to $86,154 (the “ Additional Deposit ”) in cash by wire transfer of immediately available federal funds, and failing which, Seller may terminate this Agreement by giving written notice to Purchaser. The Initial Deposit and the Additional Deposit, plus any interest accrued thereon, shall be collectively referred to herein as the “ Deposit ”. The Deposit shall be deemed to have been fully earned by Seller upon the execution and delivery of this Agreement and shall be non-refundable except (i) pursuant to Section 2.2(b), (ii) pursuant to Section 2.4, (iii) pursuant to Section 5.2 or (iv) in the event of a default hereunder by Seller and a termination of this Agreement by Purchaser under Section 6.1, and if the Closing occurs the Deposit shall be paid to Seller and credited against the Purchase Price at the Closing in accordance with the terms of Section 1.3. Until the Closing or earlier termination of this Agreement, the Escrow Agent shall hold the Deposit and all interest thereon and proceeds thereof subject to the terms of this Agreement.

Section 1.6. Escrow Agent .

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ARTICLE II.

TITLE AND SURVEY; DUE DILIGENCE PERIOD

Section 2.2. Title Review .

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Section 2.3. Due Diligence Period .

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patent construction defects or physical conditions, violations or any applicable laws and any and all other facts, omissions, events, circumstances or matters regarding the Property.

Section 2.8. Survival . The provisions of Sections 2.3, 2.4, 2.5, 2.6 and 2.7 and this Section 2.8 shall survive the Closing or any termination of this Agreement.

ARTICLE III.

REPRESENTATIONS, WARRANTIES AND COVENANTS

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constitute a default under the organizational documents of Seller or the Company or (iii) conflict with, result in a breach of, or constitute a default under any note or other evidence of indebtedness, any mortgage, deed of trust or indenture, or any other material agreement or instrument to which Seller or the Company is a party or by which Seller or the Company may be bound in any manner that would individually or in the aggregate interfere with the consummation of the transaction contemplated by this Agreement or have a material adverse effect on the Company or the Property.

(h) Non-Foreign Entity . Seller is not a “foreign person” within the meaning of Section 1445(f) of the Internal Revenue Code of 1986, as amended.

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(j) ERISA . Seller is not a “benefit plan investor” within the meaning of and subject to the Employee Retirement Income Security Act of 1974, as amended.

(m) Condemnation . Seller has received no written notice of and has no knowledge of any pending or threatened condemnation proceedings relating to the Property.

(n) Title . There are no outstanding agreements, options, rights of first refusal or rights of first offer with respect to the purchase and sale of the Property other than this Agreement.

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(t) Employees . The Company has no employees.

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References to the “knowledge” of Seller refer only to the current actual knowledge of David W. Snyder and Paul Priebe without any duty of inquiry or investigation and shall not be

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Section 3.2. Seller’s Covenants .

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herein, “ Rent Ready Condition ” shall mean “made ready” and suitable for occupancy in accordance with the Company’s current standards.

(f) Delinquency Report . Seller shall provide Purchaser with a delinquency report on a monthly basis until Closing, listing all delinquent tenants by amount and time delinquent.

(c) Consents . No consent, waiver, approval or authorization is required from any person or entity (that has not already been obtained) in connection with the execution and delivery of this Agreement by Purchaser or the performance by Purchaser of the transactions contemplated hereby.

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Section 3.4. Purchaser’s Covenants . During the Contract Period, Purchaser shall observe all of the covenants and conditions applicable to Purchaser hereunder.

Section 3.6. Survival; Limitation on Liability of Seller Parties .

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ARTICLE IV.

CLOSING

Section 4.3. Conditions Precedent to the Obligations of Seller . The obligation of Seller to consummate the transaction contemplated

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hereunder shall be subject to the fulfillment on or before the Closing Date of each of the following conditions, any or all of which may be waived by Seller in its sole discretion:

(d) Purchaser shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Purchaser as of the Closing Date; and

(e) the closing date under the Related Agreements shall be the same as the Closing Date hereunder, and the closing under the Related Agreements shall occur simultaneously with the Closing hereunder.

(c) Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Seller as of the Closing Date;

(d) Seller shall have paid off or caused to be removed any Monetary Liens or arranged for the payoff or removal of the same concurrent with the Closing pursuant to Section 4.8;

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Section 4.5. Credits and Prorations .

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be, shall make an appropriate payment to the other party based on such recalculation within 30 days after the parties agree on the recalculation.

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Section 4.6. Seller’s Obligations at Closing . At Closing, Seller shall:

(d) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Seller;

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(e) deliver to the Title Company an owner’s affidavit duly executed by the Company, in customary form reasonably acceptable to the Title Company;

(h) deliver an executed counterpart to the Closing Statement;

(k) deliver a schedule of Security Deposits currently held by Seller on behalf of the Tenants; and

(l) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement.

Section 4.7. Purchaser’s Obligations at Closing . At Closing, Purchaser shall:

(a) pay to Seller, in immediately available federal funds transferred by wire pursuant to Section 1.3, the full amount of the Purchase Price, subject to prorations and adjustments as provided herein;

(b) deliver to Seller an executed counterpart to the Assignment and Assumption of Membership Interests;

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(d) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Purchaser;

(e) deliver an executed counterpart to the Closing Statement; and

(f) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement.

ARTICLE V.

RISK OF LOSS

Section 5.2. Major Damage .

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ARTICLE VI.

DEFAULT AND REMEDIES

Section 6.2. Default by Purchaser; Seller’s Remedies .

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ARTICLE VII.

MISCELLANEOUS

Section 7.1. Confidentiality .

(d) The provisions of this Section 7.1 shall survive any termination of this Agreement or the Closing for a period of three (3) years.

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Section 7.4. Related Agreements . Seller and Purchaser acknowledge that, simultaneously with the execution of this Agreement, Seller and Purchaser are entering into the

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If to Seller:		Prospect Park CRA-B1, LLC
		c/o Continental Realty Advisors, Ltd.
		10579 W. Bradford Road, Suite 100
		Littleton, Colorado 80172
		Attn: David W. Snyder

with a copy to each of:		Hamil/Martin LLC
		140 East 19 ^th Avenue, Suite 600
		Denver, Colorado, 80203-1035
		Attn: Larry Hamil, Esq.

		Ropes & Gray LLP
		Prudential Tower
		800 Boylston Street
		Boston, Massachusetts 02199
		Attn: Marc D. Lazar, Esq.
		Telephone: (617) 951-7866

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	Email: marc.lazar@ropesgray.com

If to Purchaser:	Independence Realty Operating Partnership, LP
	c/o RAIT Financial Trust
	Cira Centre
	2929 Arch Street, 17 ^th Floor
	Philadelphia, PA 19104
	Attention:	Farrell Ender
	Email:	fender@irtreit.com

with a copy to:

	RAIT Financial Trust
	2929 Arch Street, 17 ^th Floor
	Philadelphia, PA 19104
	Attention:	Jamie Reyle, Esquire
	Facsimile:	215.405.2945
	Email:	jreyle@raitft.com

Section 7.11. Electronic or Facsimile Signatures . In order to expedite

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Section 7.13. Applicable Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Kentucky without giving effect to any conflict of laws principles.

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notice may be timely performed or given on the next succeeding day which is not a Saturday, Sunday or national holiday.

Section 7.20. Tax Matters .

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contract or pursuant to any similar law, rule or regulation for a Pre-Closing Tax Period (determined in accordance with Section 7.20(c) below).

(e) Purchaser and Seller covenant and agree to cooperate with each other regarding tax matters as follows:

(iii) Purchaser shall notify Seller in writing within ten (10) days after receipt by Purchaser or the Company of any determination of liability for Taxes from an official

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(g) Except as expressly set forth in Section 7.20(e)(i), this Section 7.20 shall survive until the second anniversary of the Closing.

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ARTICLE VIII.

DEFINED TERMS

Section 8.1. Defined Terms . Certain capitalized terms used in this Agreement will have the meanings set forth below or in the Section of this Agreement referred to below:

(a) “ Additional Deposit ” is defined in Section 1.5.

(b) “ Agreement ” is defined in the preamble to this Agreement.

(e) “ Closing ” is defined in Section 4.1.

(f) “ Closing Date ” is defined in Section 4.1.

(g) “ Closing Statement ” is defined in Section 4.5(a).

(h) “ Company ” is defined in the recitals to this Agreement.

(i) “ Contracts ” means all contracts and agreements relating to the upkeep, repair, maintenance or operation of the Property which will extend beyond the Closing Date.

(j) “ Contract Period ” is defined in Section 3.2(a).

(k) “ Deposit ” is defined in Section 1.5.

(l) “ Effective Date ” is defined in the preamble to this Agreement.

(m) “ Escrow Agent ” is defined in Section 1.5.

(n) “ Expiration of the Due Diligence Period ” is defined in Section 2.3(a).

(o) “ Final Closing Statement ” is defined in Section 4.5(g).

(p) “ Initial Deposit ” is defined in Section 1.5.

(q) “ Interests ” is defined in the recitals to this Agreement.

(r) “ Leases ” means the leases, licenses and occupancy agreements covering all or any portion of the Property to the extent they are in effect on the Closing Date.

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(v) “ Property ” is defined in the recitals to this Agreement.

(x) “ Purchase Price ” is defined in Section 1.2.

(y) “ Purchaser ” is defined in the preamble to this Agreement.

(z) “ Purchaser Closing Certificate ” is defined in Section 4.7(c).

(aa) “ Related Agreements ” means the Brookside Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, Jamestown Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, Meadows Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof, and Oxmoor Interest Purchase and Sale Agreement between Purchaser and Seller, dated as of the date hereof.

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(bb) “ Released Parties ” is defined in Section 2.7.

(dd) “ Seller ” is defined in the preamble to this Agreement.

(ee) “ Seller Closing Certificate ” is defined in Section 4.6(c).

(ff) “ Seller Diligence Deliveries ” is defined in Section 2.1.

(gg) “ Seller Parties ” means Seller and the Company.

(hh) “ Survey ” is defined in Section 2.2(a).

(ii) “ Tenants ” means the tenants or occupants under the Leases.

(jj) “ Title Commitment ” is defined in Section 2.1(a).

(kk) “ Title Company ” is defined in Section 2.1(a).

(ll) “ Title Objections ” is defined in Section 2.2(b).

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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the Effective Date.


SELLER:

CRA-B1 FUND, LLC, a Delaware limited liability company

By:	Continental Realty Services, LLC,
	a Colorado limited liability company,
	its Manager

	By:	/s/ David W. Snyder
		Name:	David W. Snyder
		Title:	Manager

[Signature Page to Purchase and Sale Agreement – Prospect Park]


PURCHASER:

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP, a Delaware limited partnership

By:	Independence Realty Trust, Inc., and Maryland corporation

	By:	Independence Realty Advisors, LLC, a Delaware limited liability company, its external advisor

		By:	/s/ Farrell Ender
			Name:	Farrell Ender
			Title:	President

[Signature Page to Purchase and Sale Agreement – Prospect Park]

JOINDER BY ESCROW AGENT

Escrow Agent hereby executes this Agreement below solely for the purpose of acknowledging and agreeing to be bound by the provisions of Sections 1.5 and 1.6.


ESCROW AGENT:

LAND SERVICES USA, INC.

By:	/s/ Alison Zugschwert
	Name:	Alison Zugschwert
	Title:	Title Officer

[Signature Page to Purchase and Sale Agreement – Prospect Park]

Schedule 1.3

Allocation of Purchase Price


	Allocations
Real Property	$	13,790,000
Personal Property	$	210,000

Total Purchase Price	$	14,000,000

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Schedule 2.2(c)

Alternate Title Insurance Companies

Chicago Title Insurance Company

Commonwealth Land Title Insurance Company

Fidelity National Title Insurance Company

Old Republic National Title Insurance Company

Stewart Title Guaranty Company

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Schedule 3.1(o)

Brokerage Agreements

1.	Exclusive Sales Listing Agreement, dated as of April 1, 2014, by and between CBRE Inc. and Prospect Park CRA-B1, LLC, as amended by the Amendment to Listing Agreement, dated as of July 22, 2014.

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Schedule 3.1(x)

Organizational Documents of the Company

1.	Certificate of Formation of Prospect Park CRA-B1, LLC dated as of October 19, 2011 and filed with the Secretary of State of the State of Delaware on October 20, 2011.

2.	First Amended Limited Liability Company Agreement of Prospect Park CRA-B1, LLC dated as of November 23, 2011.

-4-

Exhibit A

Description of Land

Tract 1: That certain property known as Tract “D” of Glenridge, as shown on that certain record plat of Glenridge, as recorded in Plat and Subdivision Book 35, Page 83, in the office of the Clerk of Jefferson County, Kentucky, which plat was amended by Revision to Tracts A, B, C & D of Glenridge as recorded in Plat and Subdivision Book 36, Page 38, in the aforesaid Clerk’s Office, and was further amended by Second Revision to Tracts A, B, C & D of Glenridge as recorded in Plat and Subdivision Book 36, Page 100, in the aforesaid Clerks Office, and being more particularly described as follows:

Beginning at a point, said point being the northwest corner of a tract of land conveyed by deed to B and H Properties, by deed of record in Deed Book 5147, Page 1, in the office of the Clerk of Jefferson County, Kentucky; thence North 33° 24’ 00” West 448.81 feet to a point; thence North 56° 34’ 00” East 584.12 feet to a point; thence South 33° 13’ 52” East 104.28 feet to a point in the western line of Herr Lane; thence along said line of Herr Lane and the arc of a curve to the left having a radius of 760.00 feet and defined by a single chord as South 13° 15’ 13” East 340.32 feet to a point at the end of said curve; thence leaving said line of Herr Lane, South 53° 28’ 06” West 183.35 feet to a point; thence South 53° 29’ 57” West 283.94 feet to the point of beginning.

Tract 2: Being Tract C-2, known as Glen Eagle Drive, as shown on the minor subdivision plat, approved by the Louisville and Jefferson County Planning Commission, attached to the Deed of record in Deed Book 6393, Page 964, in the aforesaid Clerk’s Office, and more particularly described as follows:

Beginning at a point, said point being in the eastern line of U.S. Highway 42 at a point common to the southwest corner of a tract conveyed by deed to Glenridge Plaza, LTD. of record in Deed Book 5937, Page 417, in the Office of the Clerk of Jefferson County, Kentucky; thence South 63° 15’ 33” East 52.72 feet to a point; thence with the arc of a curve to the left having a radius of 193.68 feet and defined by a single chord at South 76° 11’ 24” East 86.69 feet to a point at the end of said curve; thence South 88° 07’ 20” East 74.58 feet to a point; thence South 88° 09’ 12” East 116.36 feet to a point; thence South 33° 13’ 52” East, 302.00 feet to a point; thence South 56° 34’ 00” West 42.03 feet to a point; thence North 33° 15’ 39” West, 132.73 feet to a point; thence with the arc of a curve to the left having a radius of 232.58 feet and defined by two (2) chords at North 49° 40’ 05” West 131.08 feet to a point and North 78° 26’ 55” West 100.00 feet to a point in the end of said curve; thence North 85° 04’ 31” West 7.75 feet to a point; thence North 85° 04’ 31” West 68.40 feet to a point; thence with the arc of a curve to the right having a radius of 153.50 feet and defined by a single chord at North 78° 05’ 18” West 37.34 feet to a point at the end of said curve; thence North 71° 06’ 10” West 100.76 feet to a point; thence North 22° 07’ 59” East 68.72 feet to the point of beginning.

Together with those certain easement rights as set forth in Reciprocal Access Easement Agreement dated February 17, 1996 and recorded in Deed Book 6838, Page 758 in the Office of the Clerk of Jefferson County, Kentucky.

For informational purposes only:

Tax Data: ID No. 21-2424-000D-0000 and ID No. 21-2421-00C2-0000

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Exhibit B

Seller Diligence Deliveries


1		Utility Account List (including names/addresses of utility companies; account numbers; contact names)
2		Utility billing program/detail for residents and vacant units
3		Current Rent Roll (PDF & Excel)
4		Tenant concession schedule
5		Real Estate Tax Bills for the Past Three Years
6		Property Financial and Operating Statements for 2011 (for portions of such year when the Property was owned by the Company), 2012, 2013 and YTD 2014 (PDF & Excel)
7		Property General Ledgers YTD and Past 3 Years (PDF & Excel)
8		Property Operating Budgets, if available
9		Capital Expenditure Summary for 2011 (for portions of such year when the Property was owned by the Company), 2012, 2013 and YTD 2014
10		Aged Payables and Receivables schedule
11		Payroll schedule
12		Property management contract
13		Current property, liability, rent loss and other insurance certificates
14		Insurance Claims History/Loss Runs for the Past Three Years
15		Bank statements for the past 12 months
16		Existing Vendor List (including name, address, phone number, and contact)
17		All Service and Operating Contracts and Invoices (including cable, trash & laundry if applicable)
18		List of Personal Property
19		Existing Tenant Leases and occupancy agreements to be made available on site
20		Leasing/Marketing Materials
21		Warranties, if any
22		Standard form of apartment lease
23		Intentionally Omitted
24		Construction Plan Drawings and Specification Books, to be made available on site, if any
25		Copies of permits and licenses related to or affecting the Property
26		Certificate of Occupancy, if any
27		Existing title policy and all documents and instruments referenced therein
28		Environmental reports prepared for the Seller, including asbestos and environmental audits and analyses
29		List of all pending or threatened litigation relating to Seller or the Property
30		Engineering reports, if available

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31		Most Recent ALTA/ACSM As-Built Survey
32		Master Lease, if any
33		Most Recent City and Fire Inspection Reports, if any
34		Site Plan
35		Construction Contracts for significant repairs within the last 24 months

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Exhibit C

Rent Roll

[Attached.]

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Exhibit D

Form of Assignment and Assumption of Membership Interests

ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS

THIS ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS (this “ Assignment ”), is made as of , 2014 by and between , a (“ Assignor ”), and , a (“ Assignee ”).

W I T N E S S E T H:

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows:

1. Assignment . Assignor hereby assigns, sets over and transfers to Assignee all of Assignor’s right, title and interest in, to and under the Interests.

4. Withdrawal . Assignor hereby withdraws as a member of the Company, and Assignee is hereby substituted as the sole member of the Company.

-9-

[SIGNATURE PAGE FOLLOWS]

-10-

IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the day and year first above written.


ASSIGNOR :		, a(n)


	By:

	Name:

	Title:

ASSIGNEE :		, a(n)


	By:

	Name:

	Title:

-11-

Exhibit E

Form of FIRPTA Affidavit

(a) [ ] (“ ”), is the indirect sole member of [ ], a Delaware limited liability company.

(b) [ ] is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); and

(d) [ ] address is [ ], Attention: President.

[ ] understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Dated: As of [ ], 2014.


By:
Name:
Title:

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Exhibit 12.1

RATIO OF EARNINGS TO FIXED CHARGES

Our ratio of earnings to fixed charges for the periods indicated are set forth below. For purposes of calculating the ratios set forth below, earnings represent net income from our consolidated statements of operations, as adjusted for fixed charges; fixed charges represent interest expense.

The following table presents our ratio of earnings to fixed charges for the nine-month period ended September 30, 2014 and for the four years ended December 31, 2013 and the period from March 26, 2009 (date of inception) through December 31, 2009 (dollars in thousands):


	For the Nine- Month Period Ended September 30, 2014		For the Years Ended December 31									Period from March 26, 2009 (Date of inception) Through December 31
			2013		2012		2011			2010		2009
Net income (loss)	$	2,751	$	1,274	$	427	$	(370	)	$	4	$	1
Add back fixed charges:
Interest expense		5,510		3,659		3,305		1,727			—		—

Earnings before fixed charges and preferred share dividends		8,261		4,933		3,732		1,357			4		1
Fixed charges and preferred share dividends:
Interest expense		5,510		3,659		3,305		1,727			—		—
Preferred share dividends		—		10		15		—			—		—

Total fixed charges and preferred share dividends	$	5,510	$	3,669	$	3,320	$	1,727		$	—	$	—

Ratio of earnings to fixed charges		1.5x		1.3x		1.1x		— x	⁽¹⁾		N/Ax		N/Ax
Ratio of earnings to fixed charges and preferred share dividends		1.5x		1.3x		1.1x		— x	⁽²⁾		N/A x		N/Ax

(1)	The dollar amount of the deficiency for the years ended December 31, 2011 is $0.4 million

(2)	The dollar amount of the deficiency for the years ended December 31, 2011 is $0.4 million

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Scott F. Schaeffer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Independence Realty Trust, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2014


By:		/s/ Scott F. Schaeffer
		Scott F. Schaeffer
		Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, James J. Sebra, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Independence Realty Trust, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2014


By:		/ S / J AMES J. S EBRA
		James J. Sebra
		Chief Financial Officer and Treasurer
		(Principal Financial Officer and Principal Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of Independence Realty Trust, Inc. (the “Company”) for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Chairman of the Board, Chief Executive Officer and President of the Company, certifies, to his knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2014


By:		/s/ Scott F. Schaeffer
		Scott F. Schaeffer
		Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of Independence Realty Trust, Inc. (the “Company”) for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Chief Financial Officer and Treasurer of the Company, certifies, to his knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2014


By:		/ S / J AMES J. S EBRA
		James J. Sebra
		Chief Financial Officer and Treasurer
		(Principal Financial Officer and Principal Accounting Officer)