NOTE 4: Mortgage Indebtedness

The following table contains summary information concerning the indebtedness that encumbered our properties as of March 31, 2014:


	Outstanding Principal		Carrying Amount		Effective Interest Rate			Maturity Date
Belle Creek Apartments		10,575		10,575		2.4	%(1)	April 28, 2021
Berkshire Square Apartments		8,612		8,612		4.4	%(3)	January 1, 2021
Centrepoint Apartments		17,600		17,600		3.7	%(2)	January 1, 2019
Copper Mill Apartments		7,269		7,269		5.7	%	May 1, 2021
Crestmont Apartments		6,675		6,675		5.7	%	May 1, 2021
Cumberland Glen Apartments		6,824		6,824		5.7	%	May 1, 2021
Heritage Trace Apartments		5,439		5,439		5.7	%	May 1, 2021
Runaway Bay Apartments		10,174		10,174		3.6	%	November 1, 2022
Tresa at Arrowhead		27,500		27,500		2.4	%(1)	April 28, 2021
Reserve at Eagle Ridge		18,850		18,850		4.7	%	March 1, 2024
OKC Portfolio		45,685		48,132		2.8	%(5)	April 1, 2016
Kings’ Landing		21,200		21,200		4.0	%(6)	June 1, 2021

Total mortgage debt/Weighted-Average	$	186,403	$	188,850		3.6	%

Secured Credit Facility		2,500		2,500		2.9	%(4)	October 25, 2016

Total indebtedness /Weighted-Average	$	188,903	$	191,350		3.6	%

(1)	Floating rate at 225 basis points over 30-day LIBOR. As of March 31, 2014, 30-day LIBOR was 0.15%. Interest only payments are due monthly. These mortgages are held by RAIT.

(2)	Fixed rate. Interest only payments are due monthly. Beginning February 1, 2015, principal and interest payments are required based on a 30-year amortization schedule.

(3)	Fixed Rate. Interest only payments are due monthly. Beginning February 1, 2016, principal and interest payments are required based on a 30-year amortization schedule.

(4)	Floating rate at 275 basis points over 30-day LIBOR. As of March 31, 2014, 30-day LIBOR was 0.15%. Interest only payments are due monthly. As of March 31, 2014, we were in compliance with all financial covenants contained in the credit facility.

(5)	Contractual interest rate is 5.6%. The debt was assumed and recorded at a premium that will be amortized to interest expense over the remaining term. Principal and interest payments are required based on a 30-year amortization schedule.

(6)	Fixed Rate. Interest only payments are due monthly. Beginning June 1, 2017, principal and interest payments are required based on a 30-year amortization schedule.

The following table contains summary information concerning the indebtedness that encumbered our properties as of December 31, 2013:


	Outstanding Principal		Carrying Amount		Effective Interest Rate			Maturity Date
Belle Creek Apartments		10,575		10,575		2.4	%(1)	April 28, 2021
Berkshire Square Apartments		8,612		8,612		4.4	%(3)	January 1, 2021
Centrepoint Apartments		17,600		17,600		3.7	%(2)	January 1, 2019
Copper Mill Apartments		7,293		7,293		5.7	%	May 1, 2021
Crestmont Apartments		6,698		6,698		5.7	%	May 1, 2021
Cumberland Glen Apartments		6,846		6,846		5.7	%	May 1, 2021
Heritage Trace Apartments		5,457		5,457		5.7	%	May 1, 2021
Runaway Bay Apartments		10,222		10,222		3.6	%	November 1, 2022
Tresa at Arrowhead		27,500		27,500		2.4	%(1)	April 28, 2021

Total mortgage debt/Weighted-Average	$	100,803	$	100,803		3.8	%

Secured Credit Facility		2,500		2,500		2.9	%(4)	October 25, 2016

Total indebtedness /Weighted-Average	$	103,303	$	103,303		3.8	%

(1)	Floating rate at 225 basis points over 30-day LIBOR. As of December 31, 2013, 30-day LIBOR was 0.17%. Interest only payments are due monthly. These mortgages are held by RAIT.

(2)	Fixed rate. Interest only payments are due monthly. Beginning February 1, 2015, principal and interest payments are required based on a 30-year amortization schedule.

(3)	Fixed Rate. Interest only payments are due monthly. Beginning February 1, 2016, principal and interest payments are required based on a 30-year amortization schedule.

(4)	Floating rate at 275 basis points over 30-day LIBOR. As of December 31, 2013, 30-day LIBOR was 0.17%. Interest only payments are due monthly. As of March 31, 2014, we were in compliance with all financial covenants contained in the credit facility.

The weighted average interest rate of our mortgage indebtedness was 3.6% as of March 31, 2014. As of March 31, 2014, RAIT held $38,075 of our debt while $150,828 was held by third parties. As of December 31, 2013, RAIT held $38,075 of our debt while $65,228 was held by third parties. For the three-months ended March 31, 2014 and 2013, we paid approximately $238 and $238 respectively, of interest to RAIT.

On March 31, 2014, in connection with the acquisition of King’s Landing, we assumed $21,200 of an existing loan secured by the property. The loan bears interest at a fixed rate of 4.0% per annum, provides for monthly payments of interest only until June 1, 2017 when principal and interest payments will be due monthly based on a 30-year amortization schedule, and matures on June 1, 2021.

On February 28, 2014, in connection with the acquisition of the OKC Portfolio we assumed $45,763 of an existing loan secured by the property. The Loan bears interest at a fixed rate of 5.6% per annum, provides for monthly payments of principal and interest based on a 30-year amortization schedule and matures on April 1, 2016. We recorded the debt assumed at its fair value of $48,312 based on a market rate of 2.8% for the remaining term. The resulting premium of $2,549 will be amortized to interest expense over the remaining term of the mortgage.

On February 7, 2014, we entered into a loan agreement for an $18,850 loan secured by a first mortgage on our Reserve at Eagle Ridge property. The loan bears interest at a fixed rate of 4.7% per annum, provides for monthly payments of interest only until the maturity date of March 1, 2024 when the principal balance, accrued interest and all other amounts due under the loan become due.