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Notes Receivable
 12 Months Ended
Dec. 31, 2016
Notes Receivable.  
Notes Receivable

7. Notes Receivable

Notes receivable consist of various loans, and line of credit agreements with certain operators. During 2016, we committed to fund three new loans to existing operators as follows (dollar amounts in thousands):

 

 

 

 

 

 

 

 

 

 

 

Total

 

Interest

 

Maturity

 

Type of Property

 

Commitment

 

Rate

 

Date

 

Skilled Nursing

  

$
1,400

  
15.00

%  
2021

  

Assisted Living

 

 
325

 
12.00

%  
2018

 

Skilled Nursing

 

 
12,500

 
12.41

%
2021

 

Totals

 

$
14,225

 

 

 

 

 

 

During 2016, we originated a $1,400,000 mezzanine loan on two skilled nursing centers, funding $1,200,000 at closing with a commitment to fund an additional $200,000 upon achieving certain coverage ratios. The skilled nursing centers are located in Oregon and totaling 146 beds. The mezzanine loan has a five-year term and a rate of 15%. We have evaluated this ADC arrangement and determined that the characteristics are similar to a loan, and accordingly, the investment is recorded as a loan. Additionally, we purchased a $12,500,000 mezzanine loan on a portfolio of 64 skilled nursing centers located in eight states. The mezzanine loan has a five-year term and a rate of LIBOR plus 11.75%. We have evaluated this ADC arrangement and determined that the characteristics are similar to a loan, and accordingly, the investment is recorded as a loan.

The following table summarizes our notes receivable activities for the fiscal years 2016, 2015 and 2014 (dollar amounts in thousands):

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 

 

2016

 

2015

 

2014

Advances and Originations under notes receivable

$
14,969

 

$
1,554

 

$
1,263

Principal payments received under notes receivable

 
(100)

 

 

 —

 

 
(113)

Reclassified to real estate under development (1)

 
(237)

 

 
(1,035)

 

 
(304)

Notes Receivable reserve

 
(166)

 

 

 —

 

 

 —

Net increase in notes receivable

$
14,466

 

$
519

 

$
846

(1)

Represents pre-development loans which matured due to land acquisitions and commencement of development projects.