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Notes Receivable, Net

12 Months Ended

Dec. 31, 2019

Accounts And Notes Receivable Net [Abstract]

3. Notes Receivable, Net

The Company’s notes receivable, net were generally collateralized either by the underlying properties or the borrower’s ownership interest in the entities that own the properties, and were as follows (dollars in thousands):

	December 31,		December 31,		December 31, 2019
Description	2019		2018		Number		Maturity Date	Interest Rate
Core Portfolio ^(a)	$	76,467	$	58,637		5	Apr 2020 - Apr 2026	4.7% - 8.1%
Fund II		33,170		32,582		1	Dec 2020	1.75%
Fund III		5,306		5,306		1	Jul 2020	18.0%
Fund IV		—		15,250		—	Feb 2021	15.3%
	$	114,943	$	111,775		7

(a)

Includes two notes receivable from OP Unit holders, which are collateralized by their OP Units, with balances totaling $6.5 million at December 31, 2019 and $4.8 million at December 31, 2018.

During the year ended December 31, 2019, the Company:

•

redeemed its $15.3 million Fund IV investment plus accrued interest of $10.0 million;

•

provided seller financing to the buyer in the amount of $13.5 million with an effective interest rate of 5.1%, collateralized by Pacesetter Park, in connection with the sale of the property (Note 2);

•

funded an additional $4.3 million on a Core note receivable from an OP Unit holder;

•

increased the balance of a Fund II note receivable by the interest accrued of $0.4 million;

•

stopped accruing interest on one Fund III loan, due to the estimated market value of the collateral. The note had $4.7 million of accrued interest at each of December 31, 2018 and December 31, 2019 and was guaranteed by a third party;

•

extended the maturity for a Core note receivable to June 2, 2020; and

•

modified one Core loan to defer $0.4 million of interest until maturity. Subsequent to modification, the first mortgage, which aggregated $20.8 million including accrued interest, was in default as of December 31, 2019. The Company believes that the collateral is sufficient to cover the outstanding principal and interest.

During the year ended December 31, 2018, the Company:

•

exchanged $22.0 million of a Core note receivable plus accrued interest thereon of $0.3 million for an additional undivided interest in the Town Center property (Note 4);

•

received full payment on $26.0 million of Core notes receivable plus accrued interest of $0.2 million;

•

funded an additional $2.8 million to its existing $15.0 million Core note receivable and entered into an agreement to extend the maturity to April 1, 2020;

•

advanced an additional $0.2 million on a Fund III note receivable; and

•

increased the balance of a Fund II note receivable by the interest accrued of $0.8 million.

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.

Earnings from these notes and mortgages receivable are reported within the Company’s Structured Financing segment (Note 12). See Note 17 for information about investments subsequent to December 31, 2019.