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NOTES RECEIVABLE | 9 Months Ended
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Sep. 30, 2013
Mortgage Loans on Real Estate [Abstract] |
NOTES RECEIVABLE | NOTES RECEIVABLE As of September 30, 2013, the Company’s notes receivable, net, aggregated $95.4 million, and were collateralized either by the underlying properties or the borrowers' ownership interests in the entities that own the properties and/or by the borrowers' personal guarantee subject, as applicable, to senior liens, as follows:
(dollars in thousands) |  |  |  |
Note description | Effective interest rate (1) | First Priority liens | Net Carrying Amounts of Notes Receivable as of September 30, 2013 |  | Net Carrying Amounts of Notes Receivable as of December 31, 2012 | Maturity date | Extension Options
First Mortgage Loan | 12.0% | $ | — |  | $ | 12,204 |  |  | $ | 12,333 |  | 12/1/2013 | — |
First Mortgage Loan | 6.0% | — |  | — |  |  | 10,250 |  | 12/31/2013 | — |
First Mortgage Loan | 8.0% | — |  | 8,000 |  |  | 8,000 |  | 12/31/2013 | — |
Mezzanine Loan 2 | 10.0% | 89,566 |  | 9,089 |  |  | 9,089 |  | 12/31/2013 | — |
First Mortgage Loan | 11.0% | — |  | 25,000 |  |  | 25,000 |  | 1/1/2014 | 1 x 6 months |
Zero Coupon Loan 3 | 24.0% | 166,200 |  | 4,314 |  |  | 3,961 |  | 1/3/2016 | — |
Mezzanine Loan | 15.0% | — |  | 30,879 |  |  | 30,879 |  | 11/9/2020 | — |
Mezzanine Loan 4 | 15.0% | 16,668 |  | 3,834 |  |  | 3,834 |  | Upon Capital Event | — |
First Mortgage Loan | 5.3% | — |  | — |  |  | 18,500 |  | Demand | — |
Construction Loan | 20.5% | — |  | — |  |  | 5,400 |  | 12/31/2012 | — |
Individually less than 3% 5 | 11.6% to 17.5% | 37,623 |  | 2,032 |  |  | 2,032 |  | 12/31/13 to Capital Event | — |
Total |  |  | $ | 95,352 |  |  | $ | 129,278 |  |  |  |
Notes: (1) The effective interest rate includes origination and exit fees. (2) Comprised of three cross-collateralized loans from one borrower, which are non-performing (3) The principal balance for this accrual only loan is increased by the interest accrued (4) Non-performing loan (5) Consists of three loans two of which are non-performing, with an aggregate face value of $5.7 million, of which $3.9 million has been reserved During January 2013, Fund III received a payment of $2.5 million, representing the full principal and interest on a note that had been previously written off. During February 2013, Fund III, in conjunction with its acquisition of Nostrand Place (Note 4), received repayment on $13.0 million of its first mortgage loan of $18.5 million and contributed the remaining unliquidated balance to a joint venture. During March 2013, the Company received a payment of $5.4 million, representing full payment on a construction loan. During September 2013, the Company received a payment of $10.3 million, representing full payment of principal and accrued interest on a first mortgage loan that was scheduled to mature on December 31, 2013. The Company monitors the credit quality of its notes receivable on an ongoing basis and considers indicators of credit quality such as loan payment activity, the estimated fair value of the underlying collateral, the seniority of the Company's loan in relation to other debt secured by the collateral and the prospects of the borrower. As of September 30, 2013, the Company held six non-performing notes aggregating $18.6 million for which payment was delinquent. Based primarily on the indicators noted above, the Company has established a reserve of $3.9 million as of September 30, 2013 related to these notes. The following table reconciles the allowance for notes receivable from December 31, 2012 to September 30, 2013:
6. | NOTES RECEIVABLE (continued)
(dollars in thousands) | Allowance for Notes Receivable
Balance at December 31, 2012 | $ | 3,681 |
Additional reserves | 238 |
Recoveries | — |
Charge-offs and reclassifications | — |
Balance at September 30, 2013 | $ | 3,919 |

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- Definition The entire disclosure for mortgage loans on real estate, this includes the supplemental information pertaining to each mortgage loan receivable that equals or exceeds three percent of the carrying amount of mortgages. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04.(c) Schedule IV) -URI http://asc.fasb.org/extlink&oid=27047687&loc=d3e5864-122674 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 29 -Article 12 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Paragraph c -Subparagraph Schedule IV -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 948 -SubTopic 310 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-29) -URI http://asc.fasb.org/extlink&oid=6589523&loc=d3e617274-123014 + Details
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