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NOTES RECEIVABLE, PREFERRED EQUITY, AND OTHER REAL ESTATE RELATED INVESTMENTS | 12 Months Ended
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Dec. 31, 2013
Mortgage Loans on Real Estate [Abstract] |
Notes Receivable, Preferred Equity and Other Real Estate Related Investments | Notes Receivable, Preferred Equity and Other Real Estate Related Investments During 2013, the Company made total investments in notes receivable and preferred equity investments of $45.0 million and total collections of $29.6 million. The following table reconciles notes receivable investments from January 1, 2011 to December 31, 2013:
|  | For the years ended December 31,
(dollars in thousands) |  | 2013 |  | 2012 |  | 2011
Beginning Balance |  | $ | 129,278 |  |  | $ | 59,989 |  |  | $ | 89,202 |
Additions during period: |  |  |  |  |  |  |  |  |
New investments |  | 45,000 |  |  | 108,629 |  |  | 34,758 |
Deductions during period: |  |  |  |  |  |  |  |  |
Collections of principal |  | (29,583 | ) |  | (25,388 | ) |  | (56,517 | )
Conversion to real estate through receipt of deed or through foreclosure |  | (18,500 | ) |  | (14,000 | ) |  | — |
Reclass to investments in unconsolidated affiliates |  | — |  |  | — |  |  | (8,000 | )
Non-cash accretion of notes receivable |  | 461 |  |  | 453 |  |  | 786 |
Reserves |  | — |  |  | (405 | ) |  | (240 | )
Ending Balance |  | $ | 126,656 |  |  | $ | 129,278 |  |  | $ | 59,989 |
As of December 31, 2013, the Company’s notes receivable, net, approximated $126.7 million and were collateralized by the underlying properties, the borrower’s ownership interest in the entities that own the properties and/or by the borrower’s personal guarantee. Notes receivable were as follows at December 31, 2013: ACADIA REALTY TRUST AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. Notes Receivable, Preferred Equity and Other Real Estate Related Investments, continued
Note Description |  | Effective interest rate (1) |  | First Priority Liens |  | Net Carrying Amount of Notes Receivable as of December 31, 2013 |  | Net Carrying Amount of Notes Receivable as of December 31, 2012 |  | Maturity Date |  | Extension Options
(dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |
First Mortgage Loan |  | 5.5% |  | $ | — |  |  | $ | 42,000 |  |  | $ | 25,000 |  |  | 1/31/2014 |  | — |
First Mortgage Loan |  | 7.7% |  | — |  |  | 12,000 |  |  | — |  |  | 1/1/2015 |  | — |
Zero Coupon Loan 2 |  | 24.0% |  | 166,200 |  |  | 4,431 |  |  | 3,961 |  |  | 1/3/2016 |  | — |
Preferred Equity |  | 8.1% |  | 20,855 |  |  | 13,000 |  |  | — |  |  | 9/1/2017 |  | — |
Mezzanine Loan |  | 15.0% |  | — |  |  | 30,879 |  |  | 30,879 |  |  | 11/9/2020 |  | — |
First Mortgage Loan |  | 8.0% |  | — |  |  | 6,400 |  |  | 8,000 |  |  | Demand |  | — |
Mezzanine Loan 3 |  | 10.0% |  | 89,566 |  |  | 9,089 |  |  | 9,089 |  |  | Demand |  | — |
First Mortgage Loan |  | 5.3% |  | — |  |  | — |  |  | 18,500 |  |  | Demand |  | — |
Mezzanine Loan 4 |  | 15.0% |  | 16,668 |  |  | 3,834 |  |  | 3,834 |  |  | Upon Capital Event |  | — |
Construction Loan |  | 20.5% |  | — |  |  | — |  |  | 5,400 |  |  | 12/31/2012 |  | — |
First Mortgage Loan |  | 12.0% |  | — |  |  | — |  |  | 12,333 |  |  | 12/1/2013 |  | — |
First Mortgage Loan |  | 6.0% |  | — |  |  | — |  |  | 10,250 |  |  | 12/31/2013 |  | — |
Individually less than 3% 5 |  | 2.5% + LIBOR to 17.5% |  | 37,623 |  |  | 5,023 |  |  | 2,032 |  |  | 12/31/2014 to Capital Event |  | — |
Total |  |  |  |  |  | $ | 126,656 |  |  | $ | 129,278 |  |  |  |  |
Notes: (1) The effective interest rate includes origination and exit fees. (2) The principal balance for this accrual only loan is increased by the interest accrued (3) Comprised of three cross-collateralized loans from one borrower, which are non-performing (4) Non-performing loan (5) Consists of four loans, two of which are non-performing, with an aggregate face value of $5.7 million, of which $3.7 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. This has been recognized as other income in the consolidated statement of income. During February 2013, Fund III, in conjunction with its acquisition of Nostrand Place (Note 2), 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. During November 2013, Fund I received payment of $12.5 million representing the remaining $12.2 million of principal on its note related to the sale of the Kroger/Safeway portfolio and $0.3 million of interest. ACADIA REALTY TRUST AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. Notes Receivable, Preferred Equity and Other Real Estate Related Investments, continued During December 2013, the Company received a $1.6 million payment on an $8.0 million note representing the release price on one of the three properties on which the note was collateralized. The balance of $6.4 million remains outstanding. During December 2013, the Company made a preferred equity investment in a joint venture for $13.0 million. The joint venture owns a property and the agreement provides the Company with the first right of offer to purchase the property should the Members decide to sell. The investment has a mandatory redemption date of September 1, 2017 and earns a preferred return rate of 8.1%. During December 2013, the Company made a $12.0 million loan, which is collateralized by a property located in Manhattan. The loan bears interest at 7.7% and matures January 1, 2015. During December 2013, the Company amended a $25.0 million loan which bore interest at 9.0% and was set to mature January 1, 2014. The amended note increased the principal amount to $42.0 million and adjusted the interest rate to 5.5%. The amended note matured on January 31, 2014. This note is collateralized by a property which is currently under contract to acquire. During December 2013, the Company made a $3.0 million loan in conjunction with the acquisition of a long term master lease for a property located in Manhattan. The loan is collateralized by operating partnership units given to the buyer as part of the purchase price. The loan bears interest at LIBOR plus 2.5% and matures December 2020. 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 December 31, 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 $3.7 million as of December 31, 2013 related to these notes. The following table reconciles the activity in the allowance for notes receivable from December 31, 2011 to December 31, 2013:
| Allowance for
(dollars in thousands) | Notes Receivable
Balance at December 31, 2011 | $ | 3,276 |
Additional reserves | 405 |
Recoveries | — |
Charge-offs and reclassifications | — |
Balance at December 31, 2012 | $ | 3,681 |
Additional reserves | — |
Recoveries | — |
Charge-offs and reclassifications | — |
Balance at December 31, 2013 | $ | 3,681 |

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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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