Mortgage Notes Payable:

3 Months Ended

Mar. 31, 2012

10. Mortgage Notes Payable:

Mortgage notes payable at March 31, 2012 and December 31, 2011 consist of the following:

	Carrying Amount of Mortgage Notes(1)

	March 31, 2012				December 31, 2011
	Related Party		Other		Related Party		Other		Interest Rate(2)			Monthly Debt Service(3)		Maturity Date(4)
Chandler Fashion Center(5)	$	—	$	154,487	$	—	$	155,489		5.50	%	$	1,043		2012
Danbury Fair Mall		121,755		121,755		122,382		122,381		5.53	%		1,538		2020
Deptford Mall		—		172,500		—		172,500		5.41	%		778		2013
Deptford Mall		—		14,973		—		15,030		6.46	%		101		2016
Eastland Mall		—		168,000		—		168,000		5.79	%		811		2016
Fashion Outlets of Niagara		—		128,413		—		129,025		4.89	%		727		2020
Fiesta Mall		—		84,000		—		84,000		4.98	%		341		2015
Flagstaff Mall		—		37,000		—		37,000		5.03	%		151		2015
Freehold Raceway Mall(5)		—		232,900		—		232,900		4.20	%		805		2018
Fresno Fashion Fair		81,457		81,458		81,733		81,734		6.76	%		1,104		2015
Great Northern Mall		—		37,015		—		37,256		5.19	%		234		2013
Northgate, The Mall at(6)		—		64,000		—		38,115		3.12	%		133		2017
Oaks, The(7)		—		256,565		—		257,264		2.24	%		426		2013
Pacific View(8)		—		140,000		—		—		4.08	%		668		2022
Paradise Valley Mall(9)		—		83,250		—		84,000		6.30	%		402		2014
Prescott Gateway(10)		—		60,000		—		60,000		5.78	%		289		2011
Promenade at Casa Grande(11)		—		76,309		—		76,598		5.21	%		286		2013
Salisbury, Center at		—		115,000		—		115,000		5.83	%		555		2016
SanTan Village Regional Center(12)		—		138,087		—		138,087		2.66	%		270		2013
South Plains Mall		—		102,403		—		102,760		6.55	%		648		2015
South Towne Center		—		86,213		—		86,525		6.39	%		554		2015
Towne Mall		—		12,660		—		12,801		4.99	%		100		2012
Tucson La Encantada(13)		75,135		—		75,315		—		4.23	%		368		2022
Twenty Ninth Street(14)		—		107,000		—		107,000		3.08	%		256		2016
Valley Mall		—		43,404		—		43,543		5.85	%		280		2016
Valley River Center		—		120,000		—		120,000		5.59	%		559		2016
Valley View Center(15)		—		—		—		125,000		—			—		—
Victor Valley, Mall of(16)		—		97,000		—		97,000		2.10	%		149		2013
Vintage Faire Mall(17)		—		135,000		—		135,000		3.53	%		365		2015
Westside Pavilion(18)		—		175,000		—		175,000		2.51	%		327		2013
Wilton Mall(19)		—		40,000		—		40,000		1.25	%		31		2013

	$	278,347	$	3,084,392	$	279,430	$	3,049,008

(1): The mortgage notes payable balances include the unamortized debt premiums (discounts). Debt premiums (discounts) represent the excess (deficiency) of the fair value of debt over (under) the principal value of debt assumed in various acquisitions and are amortized into interest expense over the remaining term of the related debt in a manner that approximates the effective interest method.

Debt premiums (discounts) consist of the following:

Property Pledged as Collateral	March 31, 2012			December 31, 2011

Deptford Mall	$	(23	)	$	(25	)
Fashion Outlets of Niagara		7,966			8,198
Great Northern Mall		(49	)		(55	)
Towne Mall		65			88
Valley Mall		(372	)		(365	)

	$	7,587		$	7,841

(2): The interest rate disclosed represents the effective interest rate, including the debt premiums (discounts) and deferred finance costs.
(3): The monthly debt service represents the payment of principal and interest.
(4): The maturity date assumes that all extension options are fully exercised and that the Company does not opt to refinance the debt prior to these dates. These extension options are at the Company's discretion, subject to certain conditions, which the Company believes will be met.
(5): A 49.9% interest in the loan has been assumed by a third party in connection with a co-venture arrangement (See Note 12—Co-Venture Arrangement).
(6): On March 23, 2012, the Company borrowed an additional $25,885 and modified the loan to bear interest at LIBOR plus 2.25% with a maturity of March 1, 2017. At March 31, 2012 and December 31, 2011, the total interest rate was 3.12% and 7.0%, respectively.
(7): The loan bears interest at LIBOR plus 1.75% and matures on July 10, 2012 with an additional one-year extension option. At March 31, 2012 and December 31, 2011, the total interest rate was 2.24% and 2.26%, respectively.
(8): On March 30, 2012, the Company placed a new $140,000 loan on the property that bears interest at 4.08% with a maturity of April 1, 2022.
(9): The loan bears interest at LIBOR plus 4.0% with a total interest rate floor of 5.50% and matures on August 31, 2012 with two one-year extension options. At March 31, 2012 and December 31, 2011, the total interest rate was 6.30%.
(10): As of December 1, 2011, the loan was in maturity default. The Company is negotiating with the lender and the outcome is uncertain at this time. The loan is nonrecourse to the Company.
(11): The loan bears interest at LIBOR plus 4.0% with a LIBOR rate floor of 0.50% and matures on December 30, 2013. At March 31, 2012 and December 31, 2011, the total interest rate was 5.21%.
(12): The loan bears interest at LIBOR plus 2.10% and matures on June 13, 2012, with a one-year extension option. At March 31, 2012 and December 31, 2011, the total interest rate was 2.66% and 2.69%, respectively.
(13): On February 1, 2012, the Company replaced the existing loan on the property with a new $75,135 loan that bears interest at 4.22% and matures on March 1, 2022.
(14): The loan bears interest at LIBOR plus 2.63% and matures on January 18, 2016. At March 31, 2012 and December 31, 2011, the total interest rate was 3.08% and 3.12%, respectively.
(15): On July 15, 2010, a court appointed receiver assumed operational control and managerial responsibility for the property. On April 23, 2012, the property was sold by the receiver. As a result, the Company was discharged from the related non-recourse loan and the loan was included in liabilities on assets held for sale at March 31, 2012 (See Note 16—Discontinued Operations).

(16): The loan bears interest at LIBOR plus 1.60% and matures on May 6, 2012, with a one-year extension option. At March 31, 2012 and December 31, 2011, the total interest rate was 2.10% and 2.13%, respectively.
(17): The loan bears interest at LIBOR plus 3.0% and matures on April 27, 2015. At March 31, 2012 and December 31, 2011, the total interest rate was 3.53% and 3.56%, respectively.
(18): The loan bears interest at LIBOR plus 2.00% and matures on June 5, 2012 with a one-year extension option. The loan is covered by an interest rate cap agreement that effectively prevents LIBOR from exceeding 5.50% over the loan term. See Note 5—Derivative Instruments and Hedging Activities. At March 31, 2012 and December 31, 2011, the total interest rate was 2.51% and 2.53%, respectively.
(19): The loan bears interest at LIBOR plus 0.675% and matures on August 1, 2013. As additional collateral for the loan, the Company is required to maintain a deposit of $40,000 with the lender, which has been included in restricted cash. The interest on the deposit is not restricted. At March 31, 2012 and December 31, 2011, the total interest rate was 1.25% and 1.28%, respectively.

Most of the mortgage loan agreements contain a prepayment penalty provision for the early extinguishment of the debt.

The Company expects that all loan maturities during the next twelve months, except Prescott Gateway, will be refinanced, restructured, extended and/or paid-off from the Company's line of credit or with cash on hand.

Total interest expense capitalized was $2,353 and $3,335 during the three months ended March 31, 2012 and 2011, respectively.

Related party mortgage notes payable are amounts due to affiliates of NML. See Note 18—Related-Party Transactions for interest expense associated with loans from NML.

The fair value of mortgage notes payable at March 31, 2012 and December 31, 2011 was $3,505,144 and $3,477,483, respectively, based on current interest rates for comparable loans. The method for computing fair value (Level 2 measurement) was determined using a present value model and an interest rate that included a credit value adjustment based on the estimated value of the property that serves as collateral for the underlying debt.