Mortgage Notes Payable:

Mortgage notes payable at December 31, 2013 and 2012 consist of the following:



	Carrying Amount of Mortgage Notes(1)
	2013				2012				Effective Interest Rate(2)		Monthly Debt Service(3)		Maturity Date(4)
Property Pledged as Collateral	Related Party		Other		Related Party		Other		Effective Interest Rate(2)		Monthly Debt Service(3)		Maturity Date(4)
Arrowhead Towne Center	$	—	$	236,028	$	—	$	243,176	2.76	%	$	1,131	2018
Camelback Colonnade(5)	—		49,120		—		—		2.16	%	178		2015
Chandler Fashion Center(6)	—		200,000		—		200,000		3.77	%	625		2019
Chesterfield Towne Center(7)	—		—		—		110,000		—		—		—
Danbury Fair Mall	117,120		117,120		119,823		119,823		5.53	%	1,538		2020
Deptford Mall	—		201,622		—		205,000		3.76	%	947		2023
Deptford Mall	—		14,551		—		14,800		6.46	%	101		2016
Eastland Mall	—		168,000		—		168,000		5.79	%	811		2016
Fashion Outlets of Chicago(8)	—		91,383		—		9,165		2.96	%	203		2017
Fashion Outlets of Niagara Falls USA	—		124,030		—		126,584		4.89	%	727		2020
Fiesta Mall(9)	—		—		—		84,000		—		—		—
Flagstaff Mall	—		37,000		—		37,000		5.03	%	153		2015
FlatIron Crossing(10)	—		268,000		—		173,561		3.90	%	1,393		2021
Freehold Raceway Mall(6)	—		232,900		—		232,900		4.20	%	805		2018
Fresno Fashion Fair	79,391		79,390		80,601		80,602		6.76	%	1,104		2015
Great Northern Mall	—		35,484		—		36,395		5.19	%	234		(11)
Green Acres Mall(12)	—		319,850		—		—		3.61	%	1,447		2021
Kings Plaza Shopping Center(13)	—		490,548		—		354,000		3.67	%	2,229		2019
Northgate Mall(14)	—		64,000		—		64,000		3.04	%	130		2017
Oaks, The	—		214,239		—		218,119		4.14	%	1,064		2022
Pacific View	—		135,835		—		138,367		4.08	%	668		2022
Paradise Valley Mall(15)	—		—		—		81,000		—		—		—
Promenade at Casa Grande(16)	—		—		—		73,700		—		—		—
Salisbury, Centre at(7)	—		—		—		115,000		—		—		—
Santa Monica Place	—		235,445		—		240,000		2.99	%	1,004		2018
SanTan Village Regional Center(17)	—		136,629		—		138,087		3.14	%	589		2019
South Plains Mall	—		99,833		—		101,340		6.59	%	648		2015
South Towne Center(18)	—		—		—		85,247		—		—		—
Superstition Springs Center(19)	—		68,395		—		—		2.00	%	139		2016
Towne Mall	—		22,996		—		23,369		4.48	%	117		2022
Tucson La Encantada	72,870		—		74,185		—		4.23	%	368		2022
Twenty Ninth Street(20)	—		—		—		107,000		—		—		—
Valley Mall	—		42,155		—		42,891		5.85	%	280		2016
Valley River Center	—		120,000		—		120,000		5.59	%	558		2016
Victor Valley, Mall of(21)	—		90,000		—		90,000		2.73	%	183		2014
Vintage Faire Mall(18)	—		99,083		—		135,000		5.81	%	586		2015
Westside Pavilion	—		152,173		—		154,608		4.49	%	783		2022
Wilton Mall(22)	—		—		—		40,000		—		—		—
	$	269,381	$	4,145,809	$	274,609	$	4,162,734


(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.

The debt premiums (discounts) as of December 31, 2013 and 2012 consist of the following:



Property Pledged as Collateral	2013			2012
Arrowhead Towne Center	$	14,642		$	17,716
Camelback Colonnade	2,120			—
Deptford Mall	(14		)	(19		)
Fashion Outlets of Niagara Falls USA	6,342			7,270
FlatIron Crossing	—			5,232
Great Northern Mall	—			(28		)
Superstition Springs Center	895			—
Valley Mall	(219		)	(307		)
	$	23,766		$	29,864


(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)	On September 17, 2013, the Company obtained control of the consolidated joint venture as a result of the Camelback Colonnade Restructuring (See Note 15—Acquisitions). The loan on the property bears interest at an effective rate of 2.16% and matures on October 12, 2015.


(6)	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).


(7)	On December 11, 2013, in connection with the sale of the property (See Note 16—Discontinued Operations), a third party assumed the existing loan on the property. As a result, the Company has been discharged from this non-recourse loan.


(8)	The construction loan on the property allows for borrowings up to $140,000, bears interest at LIBOR plus 2.50% and matures on March 5, 2017, including extension options. At December 31, 2013 and 2012, the total interest rate was 2.96% and 3.00%, respectively.


(9)	On September 30, 2013, the Company conveyed the property to the lender by a deed-in-lieu of foreclosure. As a result, the Company has been discharged from this non-recourse loan (See Note 16—Discontinued Operations).


(10)	On June 4, 2013, the existing loan was paid off in full, which resulted in a gain of $2,791 on the early extinguishment of debt. On November 8, 2013, the Company placed a new $268,000 loan on the property that bears interest at an effective rate of 3.90% and matures on January 5, 2021.


(11)	The loan's original maturity date was December 1, 2013. Accordingly, the loan was in maturity default subsequent to that date. As a result, the Company accrued default interest on the loan at a rate of 4% in addition to the effective rate of interest of 5.19%. In February 2014, the Company reached an agreement with the lender to extend the loan to January 1, 2015 and waive the default interest.

(12)

On January 24, 2013, in connection with the Company's acquisition of the property (See Note 15—Acquisitions), the Company placed a new loan on the property that allowed for borrowings of up to $325,000, bears interest at an effective interest rate of 3.61% and matures on February 3, 2021. Concurrent with the acquisition, the Company borrowed $100,000 on the loan. On January 31, 2013, the Company exercised its option to borrow an additional $225,000 on the loan.


(13)	On January 3, 2013, the Company exercised its option to borrow an additional $146,000 on the loan.


(14)	The loan bears interest at LIBOR plus 2.25% and matures on March 1, 2017. At December 31, 2013 and 2012, the total interest rate was 3.04% and 3.09%, respectively.


(15)	On August 26, 2013, the loan was paid off in full.


(16)	On December 30, 2013, the loan was paid off in full.


(17)	On May 30, 2013, the consolidated joint venture replaced the existing loan on the property with a new $138,000 loan that bears interest at an effective rate of 3.14% and matures on June 1, 2019.


(18)	On April 30, 2013, the existing loan on Vintage Faire Mall was paid off in full, resulting in a loss of $853 on the early extinguishment of debt. Concurrently, the loan on South Towne Center was transferred to Vintage Faire Mall. An additional $15,200 was borrowed on the loan on Vintage Faire Mall that bears interest at an effective rate of 2.91% and matures on November 5, 2015.


(19)	On October 24, 2013, the Company purchased the 33.3% interest in Superstition Springs Center that it did not own (See Note 15—Acquisitions). In connection with the acquisition, the Company assumed the loan on the property with a fair value of $68,448 that bears interest at an effective rate of 2.00% and matures on October 28, 2016.


(20)	On November 8, 2013, the loan was paid off in full, which resulted in a loss of $506 on the early extinguishment of debt.


(21)	The loan bears interest at LIBOR plus 2.25% and matures on November 6, 2014. At December 31, 2013 and 2012, the total interest rate was 2.73% and 2.12%, respectively.


(22)	On August 1, 2013, the loan was paid off in full.

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

Most of the Company's mortgage notes payable are secured by the properties on which they are placed and are non-recourse to the Company. As of December 31, 2013 and 2012, a total of $77,192 and $213,466, respectively, of the mortgage notes payable could become recourse to the Company. The Company had indemnity agreements from consolidated joint venture partners for $28,208 of the guaranteed amount at December 31, 2012.

The Company expects all loan maturities during the next twelve months 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 during the years ended December 31, 2013, 2012 and 2011 was $10,829, $10,703 and $11,905, respectively.

Related party mortgage notes payable are amounts due to affiliates of NML. See Note 19—Related Party Transactions for interest expense associated with loans from NML.

The estimated fair value (Level 2 measurement) of mortgage notes payable at December 31, 2013 and 2012 was $4,500,177 and $4,567,658, respectively, based on current interest rates for comparable loans. The method for computing fair value 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.

The future maturities of mortgage notes payable are as follows:



2014	$	157,529
2015	500,772
2016	476,059
2017	220,712
2018	693,060
Thereafter	2,343,292
	4,391,424
Debt premium, net	23,766
	$	4,415,190

The future maturities reflected above reflect the extension options that the Company believes will be exercised.