The other housing supply risk relates to for-sale housing production. We continue to believe that affordable for-sale housing is a significant threat to apartment rent growth. Our for-sale supply expectations remain muted in our coastal markets, largely due to high median home prices and restrictive lending practices, which should be beneficial to Essex. Seattle single-family deliveries are estimated to approach 0.9%, or 6,300 units, in 2014. However, both Northern and Southern California have very little for-sale supply, averaging less than 0.2% of stock in 2012, growing to 0.4% in 2014. As a result, even with the growing apartment supply, we expect very tight housing conditions in each of our targeted markets through 2014.

Subsequent to quarter end, we completed the buyout of our partner's interest in Skyline apartments located near Irvine in Orange County. I have commented previously that institutional co-investments provide an important alternative source of capital as compared to financing on Essex's balance sheet. In this case, we estimate that we issued 320,000 fewer common shares by acquiring Skyline initially with a partner and then the subsequent partner buyout as compared to the pro forma acquisition of Skyline on our balance sheet back in March of 2010. Obviously, the stock price performance was a major factor in that result.

In development, we started 5 development projects in 2011 and started the second phase of our Epic community in San Jose during the quarter, all of which are outlined on Page S-9 of the supplement. The average cap rate on these construction projects based on current market rents is approximately 6%.

Aside from these transactions, our Shadow pipeline, which is not included on S-9, consists of 3 potential developments in Northern California that could start in 2012 and have an expected cost of approximately $360 million. Thus, by the end of the year, we expect our construction pipeline to aggregate up to $870 million, of which Essex will own from 50% to 55%.

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