On October 18, 2016, New Market – Champions, LLC (the
“Purchaser”), an indirect, wholly-owned subsidiary of Preferred
Apartment Communities Operating Partnership, L.P. (“PAC-OP”),
completed the acquisition of a fee simple interest in a
grocery-anchored shopping center in Houston, Texas (“Champions
Village”) from HR Venture Properties I, LLC (the “Seller”).
Preferred Apartment Communities, Inc. (the “Company”) is the
general partner of, and owner of an approximate 96.5% interest in,
PAC-OP. Outside of the acquisition of Champions Village, there is
no relationship between the Company, PAC-OP or the Purchaser and
the Seller.

This Current Report on Form 8-K is filed to provide certain
financial information related to its acquisition of Champions
Village required by Item 9.01(a) and (b) of Form 8-K.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

CHAMPIONS VILLAGE

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

WITH INDEPENDENT AUDITORS’ REPORT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 (UNAUDITED) AND

THE YEAR ENDED DECEMBER 31, 2015

INDEPENDENT AUDITORS REPORT

To Preferred Apartment Communities, Inc.:

We have audited the accompanying Statement of Revenues and Certain
Expenses of Champions Village, for the year ended December 31,
2015, and the related notes (the Statement).

Management’s Responsibility>for the Statement

Management is responsible for the preparation and fair presentation
of this Statement in accordance with accounting principles
generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of the Statement
that is free from material misstatement, whether due to fraud or
error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Statement based
on our audit. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the Statement is free from
material misstatement.

An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the Statement. The procedures
selected depend on the auditors judgment, including the assessment
of the risks of material misstatement of the Statement, whether due
to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and
fair presentation of the Statement in order to design audit
procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the
entitys internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall
presentation of the Statement.

We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the Statement referred to above presents fairly, in
all material respects, the revenues and certain expenses described
in Note 2 of the Statement for the year ended December 31, 2015, in
accordance with accounting principles generally accepted in the
United States of America.

Emphasis of Matter

We draw attention to Note 2 of the Statement, which describes that
the accompanying Statement was prepared for the purpose of
complying with the rules and regulations under Rule 3-14 of
Regulation S-X of the Securities and Exchange Commission (for
inclusion in the Form 8-K of Preferred Apartment Communities, Inc.)
and is not intended to be a complete presentation of Champions
Villages revenues and expenses. Our opinion is not modified with
respect to this matter.

/s/ Deloitte Touche LLP

Houston, Texas

February 6, 2017

See accompanying notes to Statements of Revenues and Certain
Expenses.

Preferred Apartment Communities, Inc. (the Company) was formed as a
Maryland corporation on September 18, 2009, and has elected to be
taxed as a real estate investment trust, or REIT, under the
Internal Revenue Code of 1986, as amended, effective with its tax
year ended December 31, 2011. The Company was formed to acquire
multifamily and retail properties in select targeted markets
throughout the United States. The Company is a majority owner in
Preferred Apartment Communities Operating Partnership, L.P., which
acquired a grocery-anchored shopping center in Houston, Texas
(Champions Village or the “Property”) from an unaffiliated third
party (the Seller) on October 18, 2016. Prior to October 18, 2016,
the Seller was responsible for all accounting and management
decisions of the properties. The Property is anchored by a Randalls
grocery store and as of September 30, 2016, was 77.3% occupied.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.Basis of Presentation

The accompanying Statements of Revenues and Certain Expenses have
been prepared for the purpose of complying with Rule 3-14 of
Regulation S-X promulgated under the Securities Act of 1933, as
amended, and accordingly, are not representative of the actual
results of operations of the properties for the periods presented,
due to the exclusion of the following revenue and expenses which
may not be comparable to the proposed future operations of the
Property:

Depreciation expense;

Interest income and expense, including amortization of mortgage
loan origination costs;

Income tax expense;

Amortization of in-place leases, above/below market lease
intangibles, and lease

>>>>>>origination costs, and

Amortization of mortgage discounts and premiums.

Except as noted above, management is not aware of any material
factors relating to the property that would cause the reported
financial information not to be indicative of future operating
results. In the opinion of management, all adjustments (consisting
solely of normal recurring adjustments) necessary for the fair
presentation of these Statements of Revenues and Certain Expenses
have been included.

The Statement of Revenues and Certain Expenses and notes thereto
for the nine months ended September 30, 2016 included in this
report are unaudited. In the opinion of management, all adjustments
necessary for a fair presentation of revenues and certain expenses
have been included. Such adjustments consisted of normal recurring
items. Interim results are not necessarily indicative of results
for a full year.

The preparation of these Statements of Revenues and Certain
Expenses in conformity with accounting principles generally
accepted in the United States of America (GAAP) requires management
to make estimates and assumptions that affect the reported amounts
of revenues and certain expenses. Actual results could differ from
those estimates.

C. Revenue Recognition

Rental revenue is recognized on a straight-line basis. As such, the
rental revenue for those leases that contain rent abatements and
contractual increases are recognized on a straight-line basis over
the applicable terms of the related lease. Percentage rents, which
are based on tenants sales, are recognized once the sales reported
by such tenants exceed any applicable breakpoints as specified in
the tenants leases. The percentage rents are recognized based upon
the measurement dates specified

in the leases. Reimbursements from tenants for real estate taxes,
insurance and other shopping center operating expenses are
recognized as revenue in the period that the applicable costs are
incurred.

D. Operating expenses

Operating expenses represent the direct expenses of operating the
Property and consist primarily of repairs and maintenance, real
estate taxes, management fees, insurance, utilities and other
operating expenses that are expected to continue in the proposed
future operations of the Property.

E. Subsequent events

The Company has evaluated events through February 6, 2017, the date
the Statements of Revenues and Certain Expenses were available to
be issued and concluded that no subsequent events have occurred
that would require recognition in the financial statements or
disclosure in the notes to the Statements of Revenues and Certain
Expenses.

The future minimum lease payments to be received under
non-cancelable operating leases in effect as of December 31, 2015
are as follows:

Liabilities for loss contingencies arising from claims,
assessments, litigation, fines, penalties and other sources are
recorded when it is probable that a liability has been incurred and
the amount of the assessment can be reasonably estimated. Legal
costs incurred in connection with loss contingencies are expensed
as incurred. There is no material litigation nor to management’s
knowledge is any material litigation currently threatened against
the Property other than routine litigation, claims and
administrative proceedings arising in the ordinary course of
business.

In connection with the management of the rental operations, a
property management fee was paid to an unrelated third party, which
was calculated as 3.0% of gross cash receipts plus $1,250 per
quarter. Property management fees of $147,655 (unaudited) and
$182,367 were recorded for the nine-month period ended September
30, 2016 and the year ended December 31, 2015, respectively.

6. CONCENTRATION OF RISK

The Champions Village property is located in Houston, Texas and is
subject to the risks of real property ownership and local and
national economic growth trends.

Champions Village earned approximately 10.8% of its base rent
revenue from its anchor tenant for the year ended December 31,
2015. The loss of this tenant could have a significant negative
impact on operations.

>UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

The Companys unaudited pro forma condensed consolidated balance
sheet at September 30, 2016 illustrates the estimated effects of
the purchase of the Champions Village property referred to in Item
8.01 above (the Transaction) as if it had occurred on such date.

The accompanying unaudited pro forma condensed consolidated
statements of operations of the Company are presented for the nine
months ended September 30, 2016 and the year ended December 31,
2015 (the “Pro Forma Periods”), and illustrate the estimated
effect of the Transaction as if it had occurred on January 1, 2015.

This unaudited pro forma condensed consolidated financial
information is presented for informational purposes only and does
not purport to be indicative of the Company’s financial results as
if the transactions reflected herein had occurred on the date or
been in effect during the period indicated. This pro forma
condensed consolidated financial information should not be viewed
as indicative of the Company’s financial results in the future and
should be read in conjunction with the Company’s financial
statements as filed on Form 10-K for the year ended December 31,
2015 and on Form 10-Q for the interim period ended September 30,
2016.

The accompanying notes are an integral part of this pro forma
condensed consolidated financial statement.

The accompanying notes are an integral part of this pro forma
condensed consolidated financial statement.

The accompanying notes are an integral part of this pro forma
condensed consolidated financial statement.

1. Basis of Presentation

Preferred Apartment Communities, Inc. was formed as a Maryland
corporation on September 18, 2009, and elected to be taxed as a
real estate investment trust, or REIT, under the Internal Revenue
Code of 1986, as amended, or the Code, effective with its tax year
ended December 31, 2011. Unless the context otherwise requires,
references to the “Company”, “we”, “us”, or “our” refer to
Preferred Apartment Communities, Inc., together with its
consolidated subsidiaries, including Preferred Apartment
Communities Operating Partnership, L.P., or the Operating
Partnership. The Company was formed primarily to acquire and
operate multifamily properties in select targeted markets
throughout the United States. As part of its business strategy, the
Company may enter into forward purchase contracts or purchase
options for to-be-built multifamily communities and may make
mezzanine loans, provide deposit arrangements, or provide
performance assurances, as may be necessary or appropriate, in
connection with the development of multifamily communities and
other properties. As a secondary strategy, the Company may acquire
or originate senior mortgage loans, subordinate loans or real
estate loans secured by interests in multifamily properties,
membership or partnership interests in multifamily properties and
other multifamily related assets and invest a lesser portion of its
assets in other real estate related investments, including other
income-producing property types, senior mortgage loans, subordinate
loans or real estate loans secured by interests in other
income-producing property types, membership or partnership
interests in other income-producing property types as determined by
its Manager (as defined below) as appropriate for the Company. The
Company is externally managed and advised by Preferred Apartment
Advisors, LLC, or its Manager, a Delaware limited liability company
and a related party.

On October 18, 2016, the Company acquired a grocery-anchored
shopping center in Houston, Texas (“Champions Village”).

The Unaudited Pro Forma Condensed Consolidated Balance Sheet
includes three columns. The first column labeled “PAC REIT
Historical” represents the actual financial position of the
Company as of September 30, 2016. The second column, entitled
“Acquired Champions Village” represents the pro forma adjustments
required in order to reflect the balance sheet impact of the
addition of the Property as if the acquisition had occurred on
September 30, 2016, including the new mortgage financing. The third
column, entitled “PAC REIT Pro Forma” presents the combined pro
forma condensed consolidated balance sheet of the Company as of
September 30, 2016, as described in note 2.

The Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the nine-month period ended September 30, 2016
includes four columns. The first column labeled “PAC REIT
Historical” represents the actual results of operations of the
Company for the nine months ended September 30, 2016. The second
column, entitled “Acquired Champions Village” represents the
historical revenues and operating expenses of the Property for the
nine-month period ended September 30, 2016. The third column,
entitled “Other Pro Forma Adjustments” represents the pro forma
adjustments required to reflect the acquired Property as described
in note 3. The fourth column, entitled “PAC REIT pro forma”
presents the combined pro forma results of operations of the
Company for the nine months ended September 30, 2016.

The Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended December 31, 2015 also includes four
columns and follows the same approach described above.

The results presented on the Unaudited Pro Forma Condensed
Consolidated Statements of Operations assume the acquisition closed
on January 1, 2015 and present pro forma operating results for the
nine months ended September 30, 2016 and the year ended December
31, 2015. These Unaudited Pro Forma Condensed Consolidated
Statements of Operations should not be considered indicative of
future results.

2. Adjustments to Unaudited Pro Forma Condensed Consolidated
Balance Sheet

(A) The Company allocated the purchase price of Champions Village
to the acquired assets and liabilities based upon their fair
values, as shown in the following table. The purchase price
allocation was based upon the Company’s best estimates of the fair
values of the acquired assets and liabilities, but is preliminary
and is subject to refinement for a period of up to one year from
the closing of the acquisition.

>

The fair value of the building was estimated on an as-if-vacant
basis, based on relevant information obtained in connection with
the acquisition of these properties and is to be depreciated on a
straight-line basis over its estimated remaining useful life of 40
years. The estimated fair value of acquired in-place leases are
estimates of the costs the Company would have incurred to lease the
property to the occupancy level of the properties at the dates of
acquisition. Tenant improvements, in-place leases and above-market
and below-market leases are all depreciated or amortized over the
remaining individual non-cancelable lease terms.

(B) The Company financed the acquisition of Champions Village with
a combination of new mortgage indebtedness, a draw on its revolving
line of credit (see note 3.FF on the following page) and with cash
on hand. The deferred loan origination costs are to be amortized
over the lives of the loans using the effective interest method and
include a loan coordination fee of $394,560, which was paid to the
Company’s Manager. The pro forma adjustment to cash was calculated
as follows:

3. Adjustments to Unaudited Pro Forma Condensed Consolidated
Statements of Operations

The adjustments to the Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the nine months ended September 30,
2016 are as follows:

(AA) Reflected in the pro forma adjustment is the Company’s
estimate of the amount of below-market retail leases which are to
be amortized into income over the actual underlying lease terms.

(BB) Effective with the purchase of Champions Village by the
Company, property management was assumed by an unaffiliated third
party and the property management fee will be calculated as 3.5% of
monthly gross rental income. The pro forma adjustment reflects this
additional cost burden on the acquired property’s operations.

(CC) Reflected in the pro forma adjustment is the Company’s
estimate of the depreciation and amortization

charges that would have been incurred by Champions Village. The
adjustments utilize a straight-line depreciation method using 40
year remaining useful lives for the building, and over the
non-cancelable remaining individual lease terms ranging from one
month to 10 years for tenant improvements, in-place leases, and
above-market and below market lease intangibles.

(DD) The Company had recorded due diligence costs related to
Champions Village during the nine months ended September 30, 2016
of approximately $32,000. These costs are removed for pro forma
purposes.

(EE) The estimated asset management fee is based on 0.5% of the
total value of the Company’s assets based on their adjusted cost
before reduction for depreciation, amortization, impairment charges
and cumulative acquisition costs charged to expense in accordance
with GAAP (adjusted cost will include the purchase price,
acquisition expenses, capital expenditures and other customarily
capitalized costs). In calculating the estimated asset management
fee, the Company used the total acquired assets from Champions
Village, as adjusted, plus the pro forma loan coordination fee and
loan origination costs incurred. In addition, a similar adjustment
is included for general and administrative expense fees, recorded
as 2% of gross revenues of Champions Village for the nine months
ended September 30, 2016.

(FF) Reflected in the pro forma adjustment is the Company’s
estimate of interest expense on the $27.4 million of mortgage debt,
the amortization of associated debt issuance costs, and interest
accrued on the drawn proceeds from the Company’s revolving line of
credit of $20 million. The mortgage matures on November 1, 2021 and
accrues interest at a variable rate of the greater of 3.25% or the
monthly London Interbank Offered Rate (“1 Month LIBOR”), plus a
spread of 3.0% per annum. The revolving line of credit bears
interest at a rate of 1 Month LIBOR, plus a spread of 3.25% per
annum. If 1 Month LIBOR were to fluctuate upward or downward by
1/8%, it would result in an increase or decrease in interest
expense of approximately $33,000 for the pro forma nine month
period ended September 30, 2016.

(GG) Outstanding Class A Units of the Operating Partnership become
entitled to pro-rata distributions of profit and allocations of
loss as non-controlling interests of the Operating Partnership. The
weighted-average percentage of ownership by the non-controlling
interests was approximately 3.27% for the nine months ended
September 30, 2016. This adjustment reflects the pro-rata
adjustment to the amount of net income (loss) attributable to the
non-controlling interests.

The adjustments to the Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the year ended December 31, 2015 are as
follows:

(AA) Reflected in the pro forma adjustment is the Company’s
estimate of the amount of below-market retail leases which are to
be amortized into income over the actual underlying lease terms.

(BB) Effective with the purchase of Champions Village by the
Company, property management was assumed by an unaffiliated third
party and the property management fee will be calculated as 3.5% of
monthly gross rental income. The pro forma adjustment reflects this
additional cost burden on the acquired property’s operations.

(CC) Reflected in the pro forma adjustment is the Company’s
estimate of the depreciation and amortization charges that would
have been incurred by Champions Village. The adjustments utilize a
straight-line depreciation method using 40 year remaining useful
lives for the building, and over the non-cancelable remaining
individual lease terms ranging from one month to 10 years for
tenant improvements, in-place leases, and above-market and below
market lease intangibles.

(DD) The estimated asset management fee is based on 0.5% of the
total value of the Company’s assets based on their adjusted cost
before reduction for depreciation, amortization, impairment charges
and cumulative acquisition costs charged to expense in accordance
with GAAP (adjusted cost will include the purchase price,
acquisition expenses, capital expenditures and other customarily
capitalized costs). In calculating the estimated asset management
fee, the Company used the total acquired assets from Champions

Village, as adjusted, plus the pro forma loan coordination fees and
loan origination costs incurred. In addition, a similar adjustment
is included for general and administrative expense fees, recorded
as 2% of gross revenues of Champions Village for the year ended
December 31, 2015.

(EE) Reflected in the pro forma adjustment is the Company’s
estimate of interest expense on the $27.4 million of mortgage debt,
the amortization of associated debt issuance costs, and interest
accrued on the drawn proceeds from the Company’s revolving line of
credit of $20 million. The mortgage matures on November 1, 2021 and
accrues interest at a variable rate of the greater of 3.25% or the
monthly London Interbank Offered Rate (“1 Month LIBOR”), plus a
spread of 3.0% per annum. The revolving line of credit bears
interest at a rate of 1 Month LIBOR, plus a spread of 3.25% per
annum. If 1 Month LIBOR were to fluctuate upward or downward by
1/8%, it would result in an increase or decrease in interest
expense of approximately $34,000>for the pro forma twelve-month
period ended December 31, 2015.

(FF) Outstanding Class A Units of the Operating Partnership become
entitled to pro-rata distributions of profit and allocations of
loss as non-controlling interests of the Operating Partnership. The
weighted-average percentage of ownership by the non-controlling
interests was approximately 1.24% for the twelve months ended
December 31, 2015. This adjustment reflects the pro-rata adjustment
to the amount of net income (loss) attributable to the
non-controlling interests.