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Mortgages and Notes Receivable | 12 Months Ended
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Dec. 31, 2012
Financing Receivables [Line Items] |
Mortgages and Notes Receivable | Mortgages and Notes Receivable The following table sets forth our mortgages and notes receivable:
| December 31,
| 2012 |  | 2011
Seller financing (first mortgages) | $ | 15,853 |  |  | $ | 17,180 |
Less allowance | — |  |  | — |
| 15,853 |  |  | 17,180 |
Mortgage receivable | 8,648 |  |  | — |
Less allowance | — |  |  | — |
| 8,648 |  |  | — |
Promissory notes | 1,153 |  |  | 1,481 |
Less allowance | (182 | ) |  | (61 | )
| 971 |  |  | 1,420 |
Mortgages and notes receivable, net | $ | 25,472 |  |  | $ | 18,600 |
Our mortgages and notes receivable consist primarily of seller financing issued in conjunction with two disposition transactions in 2010 (see Note 2) and acquisition financing provided to a third party buyer of adjacent development land in Nashville, TN (see below). The seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We evaluate the collectability of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of December 31, 2012, the payments on both mortgages receivable were current and there were no other indicators of impairment on the receivables. We may be required to take impairment charges in the future if and to the extent the underlying collateral diminishes in value. During 2012, we provided an $8.6 million loan to a third party, which was used by such third party to fund a portion of the purchase price to acquire 77 acres of mixed-use development land adjacent to our 68-acre office development parcel in Nashville, TN. Initially, the loan is scheduled to mature in December 2015 and bears interest at 5.0% per year. The loan can be extended by the third party for up to three additional years, subject to applicable increases in the interest rate. We also agreed to loan such third party approximately $8.4 million to fund future infrastructure development on its 77-acre development parcel. Both loans are or will be secured by the 77-acre development parcel. We concluded this arrangement to be an interest in a variable interest entity. However, since we do not have the power to direct matters that most significantly impact the activities of the entity, we do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated and the arrangement is accounted for in mortgages and notes receivable in our Consolidated Balance Sheet at December 31, 2012. Our risk of loss with respect to this arrangement is limited to the carrying value of the note receivable and the future infrastructure development funding commitment. The following table sets forth our notes receivable allowance, which relates only to promissory notes:
| December 31,
| 2012 |  | 2011
Beginning notes receivable allowance | $ | 61 |  |  | $ | 868 |
Bad debt expense | 186 |  |  | 196 |
Recoveries/write-offs/other | (65 | ) |  | (1,003 | )
Total notes receivable allowance | $ | 182 |  |  | $ | 61 |
Highwoods Realty Limited Partnership [Member] |
Financing Receivables [Line Items] |
Mortgages and Notes Receivable | Mortgages and Notes Receivable The following table sets forth our mortgages and notes receivable:
| December 31,
| 2012 |  | 2011
Seller financing (first mortgages) | $ | 15,853 |  |  | $ | 17,180 |
Less allowance | — |  |  | — |
| 15,853 |  |  | 17,180 |
Mortgage receivable | 8,648 |  |  | — |
Less allowance | — |  |  | — |
| 8,648 |  |  | — |
Promissory notes | 1,153 |  |  | 1,481 |
Less allowance | (182 | ) |  | (61 | )
| 971 |  |  | 1,420 |
Mortgages and notes receivable, net | $ | 25,472 |  |  | $ | 18,600 |
Our mortgages and notes receivable consist primarily of seller financing issued in conjunction with two disposition transactions in 2010 (see Note 2) and acquisition financing provided to a third party buyer of adjacent development land in Nashville, TN (see below). The seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We evaluate the collectability of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of December 31, 2012, the payments on both mortgages receivable were current and there were no other indicators of impairment on the receivables. We may be required to take impairment charges in the future if and to the extent the underlying collateral diminishes in value. During 2012, we provided an $8.6 million loan to a third party, which was used by such third party to fund a portion of the purchase price to acquire 77 acres of mixed-use development land adjacent to our 68-acre office development parcel in Nashville, TN. Initially, the loan is scheduled to mature in December 2015 and bears interest at 5.0% per year. The loan can be extended by the third party for up to three additional years, subject to applicable increases in the interest rate. We also agreed to loan such third party approximately $8.4 million to fund future infrastructure development on its 77-acre development parcel. Both loans are or will be secured by the 77-acre development parcel. We concluded this arrangement to be an interest in a variable interest entity. However, since we do not have the power to direct matters that most significantly impact the activities of the entity, we do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated and the arrangement is accounted for in mortgages and notes receivable in our Consolidated Balance Sheet at December 31, 2012. Our risk of loss with respect to this arrangement is limited to the carrying value of the note receivable and the future infrastructure development funding commitment. The following table sets forth our notes receivable allowance, which relates only to promissory notes:
| December 31,
| 2012 |  | 2011
Beginning notes receivable allowance | $ | 61 |  |  | $ | 868 |
Bad debt expense | 186 |  |  | 196 |
Recoveries/write-offs/other | (65 | ) |  | (1,003 | )
Total notes receivable allowance | $ | 182 |  |  | $ | 61 |

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- Definition The entire disclosure for financing receivables. Examples of financing receivables include, but are not limited to, loans, trade accounts receivables, notes receivable, credit cards, and receivables relating to a lessor's right(s) to payment(s) from a lease other than an operating lease that is recognized as assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 55 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=7880640&loc=SL6953791-111525 + Details
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