Mortgage Notes Payable

9 Months Ended

Sep. 30, 2020

Mortgage Notes Payable:

Mortgage notes payable at September 30, 2020 and December 31, 2019 consist of the following:


	Carrying Amount of Mortgage Notes(1)
Property Pledged as Collateral	September 30, 2020		December 31, 2019		Effective Interest Rate(2)		Monthly Debt Service(3)		Maturity Date(4)
Chandler Fashion Center(5)	$	255,313	$	255,174	4.18	%	$	875	2024
Danbury Fair Mall(6)	191,028		194,718		5.56	%	1,538		2021
Fashion Outlets of Chicago	299,173		299,112		4.61	%	1,145		2031
Fashion Outlets of Niagara Falls USA(7)	103,887		106,398		4.89	%	727		2020
Freehold Raceway Mall(5)	398,503		398,379		3.94	%	1,300		2029
Fresno Fashion Fair	323,808		323,659		3.67	%	971		2026
Green Acres Commons(8)	129,617		128,926		2.87	%	250		2021
Green Acres Mall	272,402		277,747		3.61	%	1,447		2021
Kings Plaza Shopping Center	535,285		535,097		3.71	%	1,629		2030
Oaks, The	186,005		187,142		4.14	%	1,064		2022
Pacific View	115,745		118,202		4.08	%	668		2022
Queens Center	600,000		600,000		3.49	%	1,744		2025
Santa Monica Place(9)	298,379		297,817		1.75	%	375		2022
SanTan Village Regional Center	219,209		219,140		4.34	%	788		2029
Towne Mall	19,935		20,284		4.48	%	117		2022
Tucson La Encantada	62,729		63,682		4.23	%	368		2022
Victor Valley, Mall of	114,777		114,733		4.00	%	380		2024
Vintage Faire Mall	247,915		252,389		3.55	%	1,256		2026
	$	4,373,710	$	4,392,599

(1)The mortgage notes payable also include unamortized deferred finance costs that are amortized into interest expense over the remaining term of the related debt in a manner that approximates the effective interest method. Unamortized deferred finance costs were $13,403 and $16,042 at September 30, 2020 and December 31, 2019, respectively.

(2)The interest rate disclosed represents the effective interest rate, including the impact of debt premium 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 the Company's joint venture in Chandler Freehold (See Note 12—Financing Arrangement).

(6)On September 15, 2020, the Company closed on a loan extension agreement for Danbury Fair Mall. Under the extension agreement, the original loan maturity date of October 1, 2020 was extended to April 1, 2021. The loan amount and interest rate are unchanged following the extension.

(7)The loan includes unamortized debt premium of $77 and $773 at September 30, 2020 and December 31, 2019, respectively. The debt premium represents the excess of the fair value of the loan over the principal value of the loan assumed at acquisition and is amortized into interest expense over the remaining term of the loan in a manner that approximates the effective interest method. The Company has agreed to terms with the lender on a three-year extension to October 2023, and anticipates closing on the loan extension in the fourth quarter of 2020. The Company expects that the loan amount and interest rate will remain unchanged following the extension.

(8)The loan bears interest at LIBOR plus 2.15%. At September 30, 2020 and December 31, 2019, the total interest rate was 2.87% and 4.40%, respectively.

(9)The loan bears interest at LIBOR plus 1.35%. The loan is covered by an interest rate cap agreement that effectively prevents LIBOR from exceeding 4% during the period ending December 9, 2020 (See Note 5—Derivative Instruments and Hedging Activities). At September 30, 2020 and December 31, 2019, the total interest rate was 1.75% and 3.34%, respectively.

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

The Company's mortgage notes payable are secured by the properties on which they are placed and are non-recourse to the Company.

The Company expects that 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 was $1,313 and $2,704 for the three months ended ended September 30, 2020 and 2019, respectively, and $3,969 and $7,557 for the nine months ended September 30, 2020 and 2019, respectively.

The estimated fair value (Level 2 measurement) of mortgage notes payable at September 30, 2020 and December 31, 2019 was $4,418,624 and $4,427,790, respectively, based on current interest rates for comparable loans. 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.