Mortgage Notes Payable:

Mortgage notes payable at September 30, 2014 and December 31, 2013 consist of the following:



	Carrying Amount of Mortgage Notes(1)
	September 30, 2014				December 31, 2013
Property Pledged as Collateral	Related Party		Other		Related Party		Other		Effective Interest Rate(2)		Monthly Debt Service(3)		Maturity Date(4)
Arrowhead Towne Center	$	—	$	230,552	$	—	$	236,028	2.76	%	$	1,131	2018
Camelback Colonnade	—		48,233		—		49,120		2.16	%	178		2015
Chandler Fashion Center(5)	—		200,000		—		200,000		3.77	%	625		2019
Danbury Fair Mall	114,994		114,993		117,120		117,120		5.53	%	1,538		2020
Deptford Mall	—		198,785		—		201,622		3.76	%	947		2023
Deptford Mall	—		14,354		—		14,551		6.46	%	101		2016
Eastland Mall	—		168,000		—		168,000		5.79	%	811		2016
Fashion Outlets of Chicago(6)	—		117,350		—		91,383		2.95	%	259		2017
Fashion Outlets of Niagara Falls USA	—		122,053		—		124,030		4.89	%	727		2020
Flagstaff Mall	—		37,000		—		37,000		5.03	%	151		2015
FlatIron Crossing	—		263,144		—		268,000		3.90	%	1,393		2021
Freehold Raceway Mall(5)	—		230,255		—		232,900		4.20	%	1,132		2018
Fresno Fashion Fair	78,427		78,427		79,391		79,390		6.76	%	1,104		2015
Great Northern Mall(7)	—		34,747		—		35,484		6.54	%	234		2015
Green Acres Mall	—		315,126		—		319,850		3.61	%	1,447		2021
Kings Plaza Shopping Center	—		483,251		—		490,548		3.67	%	2,229		2019
Northgate Mall(8)	—		64,000		—		64,000		3.03	%	128		2017
Oaks, The	—		211,224		—		214,239		4.14	%	1,064		2022
Pacific View	—		133,869		—		135,835		4.08	%	668		2022
Santa Monica Place	—		231,638		—		235,445		2.99	%	1,004		2018
SanTan Village Regional Center	—		134,523		—		136,629		3.14	%	589		2019
South Plains Mall(9)	—		71,725		—		99,833		4.78	%	383		2015
Superstition Springs Center	—		68,158		—		68,395		1.98	%	138		2016
Towne Mall	—		22,707		—		22,996		4.48	%	117		2022
Tucson La Encantada	71,848		—		72,870		—		4.23	%	368		2022
Valley Mall	—		41,571		—		42,155		5.85	%	280		2016
Valley River Center	—		120,000		—		120,000		5.59	%	558		2016
Victor Valley, Mall of(10)	—		115,000		—		90,000		4.00	%	380		2024
Vintage Faire Mall	—		98,006		—		99,083		5.81	%	586		2015
Westside Pavilion	—		150,278		—		152,173		4.49	%	783		2022
	$	265,269	$	4,118,969	$	269,381	$	4,145,809


(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	September 30, 2014			December 31, 2013
Arrowhead Towne Center	$	12,337		$	14,642
Camelback Colonnade	1,233			2,120
Deptford Mall	(10		)	(14		)
Fashion Outlets of Niagara Falls USA	5,646			6,342
Superstition Springs Center	658			895
Valley Mall	(154		)	(219		)
	$	19,710		$	23,766


(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 10—Co-Venture Arrangement).


(6)	The construction loan on the property allows for borrowings of up to $140,000, bears interest at LIBOR plus 2.50% and matures on March 5, 2017, including extension options. At September 30, 2014 and December 31, 2013, the total interest rate was 2.95% and 2.96%, respectively.


(7)	On March 24, 2014, the loan was extended to January 1, 2015.


(8)	The loan bears interest at LIBOR plus 2.25% and matures on March 1, 2017. At September 30, 2014 and December 31, 2013, the total interest rate was 3.03% and 3.04%, respectively.


(9)	On February 7, 2014, the Company paid off in full one of the two loans on the property, which resulted in a loss of $359 on the early extinguishment of debt.


(10)	On August 28, 2014, the Company replaced the existing loan on the property with a new loan that bears interest at an effective interest rate of 4.00% and matures on September 1, 2024. The replacement of the existing loan resulted in a loss of $46 on the early extinguishment of debt.

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 September 30, 2014 and December 31, 2013, a total of $72,175 and $77,192, respectively, of the mortgage notes payable could become recourse to the Company.

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

Total interest expense capitalized was $3,930 and $2,887 for the three months ended September 30, 2014 and 2013, respectively, and $9,513 and $8,227 during the nine months ended September 30, 2014 and 2013, respectively.

Related party mortgage notes payable are amounts due to affiliates of NML. See Note 16—Related Party Transactions for interest expense associated with loans from NML.

The estimated fair value (Level 2 measurement) of mortgage notes payable at September 30, 2014 and December 31, 2013 was $4,452,658 and $4,500,177, 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.