Notes Receivable

12 Months Ended

Dec. 31, 2013

4. Notes Receivable

The Company has notes receivable, including accrued interest, that are collateralized by certain rights in development projects, partnership interests, sponsor guaranties and/or real estate assets, some of which are subordinate to other financings.

Notes receivable consist of the following (in thousands):


	December 31,				Maturity Date	Interest Rate
	2013		2012		Maturity Date	Interest Rate
Loans receivable	$	72,218	$	60,378	September 2011 to June 2023	5.7% - 14.0%
Other notes		1,034		3,093	November 2014 to September 2017	8.5% - 12.0%
Tax Increment Financing Bonds (“TIF Bonds”)^(A)		5,086		5,247	April 2014 to July 2026	5.5% - 8.5%

	$	78,338	$	68,718

(A)	Principal and interest are payable solely from the incremental real estate taxes, if any, generated by the respective shopping center and development project pursuant to the terms of the financing agreement.

As of December 31, 2013 and 2012, the Company had seven and six loans receivable outstanding, respectively. The following table summarizes the activity in loans receivable on real estate from January 1, 2012, to December 31, 2013 (in thousands):


	2013			2012
Balance at January 1	$	60,378		$	84,541
Additions:
New mortgage loans		26,508			10,239
Interest		773			876
Accretion of discount		874			826
Deductions:
Payments of principal and interest		(16,315	)		(104	)
Loan loss reserve^(A)		—			(4,300	)
Other^(B)		—			(31,700	)

Balance at December 31	$	72,218		$	60,378

(A)	Amount classified in Other expense, net in the consolidated statement of operations for the year ended December 31, 2012.

(B)

Loan assumed by the Company’s unconsolidated joint venture BRE DDR Retail Holdings I and reclassified into Investments in and Advances to Joint Ventures in the Company’s consolidated balance sheet at December 31, 2012, upon the Company’s acquisition of its equity interest in the joint venture. This loan was repaid and applied toward funding of the Blackstone Acquisition in 2013 (Note 3).

The following table summarizes the activity in the loan loss reserve from January 1, 2011, to December 31, 2013 (in thousands):


	2013		2012		2011
Balance at January 1	$	15,106	$	10,806	$	10,806
Additions:
Loan loss reserve		—		4,300		5,000	^(A)
Deductions:
Write downs		—		—		(5,000	)^(A)

Balance at December 31	$	15,106	$	15,106	$	10,806

(A)

In 2011, the Company sold a note receivable with a face value, including accrued interest, of $11.8 million for proceeds of $6.8 million, which resulted in the recognition of a $5.0 million reserve. A loan loss reserve had not been previously established based on the estimated value of the underlying real estate collateral.

At December 31, 2013, the Company had one loan outstanding aggregating $9.8 million that matured in September 2011 and was more than 90 days past due and one loan that is fully reserved. No other loans outstanding are past due. The Company is no longer accruing interest income on this note as no payments have been received. A loan loss reserve of $4.3 million was established in 2012 based on the estimated value of the underlying real estate collateral.

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

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