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Mortgage Notes Payable (Tables) | 3 Months Ended
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Mar. 31, 2014
Mortgage Notes Payable [Abstract] |
Mortgage Notes Payable | Mortgage notes payable as of March 31, 2014 and December 31, 2013 consisted of the following:
|  | March 31, 2014 |  |  | December 31, 2013 |
Mortgage note payable in monthly installments of $24,330 through July 1, 2016, including interest at a fixed rate of 6.51%; collateralized by the Havana/Parker Complex property. (1) |  | $ | 3,098,780 |  |  | $ | 3,098,780 |
Mortgage note payable in monthly installments of $42,383 through April 5,2020, including interest at a fixed rate of 5.00%; collateralized by the leases and office buildings of the Garden Gateway Plaza property. |  |  | 7,081,231 |  |  |  | 7,119,544 |
Mortgage note payable in monthly installments of $25,995 through September 1, 2015, including interest at a fixed rate of 6.50%; collateralized by the Waterman Plaza Property |  |  | 3,436,060 |  |  |  | 3,457,973 |
Mortgage note payable in monthly installments of $28,865 through March 1,2034, including interest at a variable rate ranging from 5.5% to 10.5%; with a current rate of 5.5% collateralized by the Sparky's Thousand Palms Self-Storage property. |  |  | 4,186,591 |  |  |  | 4,215,349 |
Mortgage note payable in monthly installments of $5,171 through December 18, 2022, including interest at a variable rate of currently of 4.75%; through December 20, 2020 indexed to the 5 year Interest Rate Swap rate; collateralized by the Sparky's Hesperia East Self-Storage property. |  |  | 885,764 |  |  |  | 890,774 |
Mortgage note payable in monthly installments of $17,226 through May 3, 2012, including interest at a fixed rate of 5.00%; monthly installments of $19,323 from June 3, 2012, including interest at 4.75%to maturity, or May 15, 2023; collateralized by the Sparky's Rialto Self-Storage property. |  |  | 2,154,712 |  |  |  | 2,166,791 |
Mortgage note payable in monthly installments of $28,219 through September 1, 2015, including interest at a fixed rate of 4.65%; collateralized by the Genesis Plaza property. |  |  | 4,587,056 |  |  |  | 4,618,147 |
Mortgage note payable in monthly installments of $26,962 through July 1, 2025, including interest at a fixed rate of 5.79% through July 1, 2018; collateralized by the Executive Office Park property. |  |  | 4,430,228 |  |  |  | 4,447,699 |
Mortgage note payable in monthly installments sufficient to amortize the note on a 25 year schedule and the current month interest charge (currently, approximately $36,200), interest at a variable rate of 3.0% over the one month libor with a floor of 5.75% (current rate) and a ceiling of 9.75% through May 31, 2016; collateralized by the Dakota Center property. |  |  | 5,387,067 |  |  |  | 5,417,950 |
Mortgage note payable in monthly installments of $23,919 through April 11, 2015, including interest at a fixed rate of 5.62%; collateralized by the Yucca Valley Retail Center. |  |  | 3,067,594 |  |  |  | 3,095,974 |
Mortgage note payable in monthly installments of $9,858 through January 1, 2019, including interest at a fixed rate of 4.95%; collateralized by the Rangewood Medical Office Building. |  |  | 1,139,769 |  |  |  | 1,155,305 |
Mortgage note payable in monthly installments of $7,562 through January 1, 2019, including interest at a fixed rate of 4.95%; collateralized by Regatta Square. |  |  | 1,237,090 |  |  |  | 1,244,615 |
Mortgage note payable in monthly installments of $61,573 through March 5, 2020, including interest at a fixed rate of 4.75%;collateralized by the Port of San Diego Complex. |  |  | 10,549,409 |  |  |  | 10,608,385 |
Mortgage note payable in monthly installments of $13,896 through June 1,2021, including interest at a fixed rate of 4.5% subject to reseting at the 3rd and 6th anniversary to the lender's current rate on similar loans; collateralized by the Morena Office Center. |  |  | 2,396,294 |  |  |  | 2,411,282 |
Mortgage note payable in monthly installments of $9,450 through June 1,2021, including interest at a fixed rate of 4.5% subject to reseting at the 3rd and 6th anniversary to the lender's current rate on similar loans; collateralized by the Pacific Oaks Plaza. |  |  | 1,629,464 |  |  |  | 1,639,658 |
Mortgage note payable in monthly installments of $26,043 through June 1,2022, including interest at a fixed rate of 5.1% subject to reseting at the 3rd and 6th anniversary to the lender's current rate on similar loans; collateralized by the Shoreline Medical Office Building. |  |  | 3,931,463 |  |  |  | 3,959,914 |
Mortgage note payable in monthly installments of $42,788 through December 6, 2022, including interest at a fixed rate of 4.7%; collateralized by Sparky's Palm, Joshua and Sunrise Self-Storage properties. |  |  | 8,082,911 |  |  |  | 8,116,028 |
Mortgage note payable in monthly installments of $36,701 through January 6, 2015, including interest at a fixed rate of 5.6%; collateralized by The Presidio. |  |  | 5,458,873 |  |  |  | 5,492,375 |
Mortgage note payable in monthly installments of $13,200 through June 1, 2020, including interest at a fixed rate of 5.0%; collateralized by Sparky's Lancaster Self- Storage. |  |  | 1,950,410 |  |  |  | 1,965,504 |
Mortgage note payable in monthly installments of $11,479 through August 28, 2019, including interest at a fixed rate of 4.75%; collateralized by the Fontana Medical Plaza |  |  | 1,978,217 |  |  |  | 1,990,880 |
Subtotal, NetREIT, Inc. properties |  |  | 76,668,983 |  |  |  | 77,112,927 |
Mortgage notes payable in monthly installments of $13,882; maturity date of February 10, 2014, including interest at a fixed rate of 5.50%;collateralized by 5 Model Home properties. |  |  | 964,155 |  |  |  | 1,222,266 |
Mortgage notes payable in monthly installments of $7,490; maturity date of September 15, 2015, including interest at a fixed rate of 5.75%; collateralized by 6 Model Home properties. |  |  | 589,288 |  |  |  | 778,823 |
Mortgage notes payable in monthly installments of $6,016 maturity date of December 15, 2015, including interest at a fixed rate of 5.75%; collateralized by 7 Model Home properties. |  |  | 630,104 |  |  |  | 639,007 |
Mortgage notes payable in monthly installments of $35,594; maturity dates of April 15, 2017 through June 15, 2017; including interest at fixed rate of 5.50%; collateralized by 15 Model Home properties. |  |  | 3,171,686 |  |  |  | 3,212,444 |
Mortgage notes payable in monthly installments of $14,732; maturity dates of December 15, 2017; including interest at fixed rate of 5.00%; collateralized by 12 Model Home properties. |  |  | 1,646,706 |  |  |  | 1,777,808 |
Mortgage notes payable in monthly installments of $14,561; maturity dates of December 15, 2017; including interest at fixed rate of 5.00%; collateralized by 10 Model Home properties. |  |  | 1,330,063 |  |  |  | 1,343,658 |
Mortgage notes payable in monthly installments of $4,691; maturity dates of January 15, 2018 through December 15, 2018; including interest at fixed rate of 5.07% to 5.50%; collateralized by 4 Model Home properties. |  |  | 587,118 |  |  |  | 593,505 |
Mortgage notes payable in monthly installments of $28,658; maturity dates of June 30, 2014 through January 15, 2018; including interest at fixed rate of 5.50% to 5.84%; collateralized by 14 Model Home properties. |  |  | 2,472,081 |  |  |  | 2,871,286 |
Mortgage notes payable in monthly installments of $7,721; maturity dates of December 15, 2017 through July 15, 2018; including interest at fixed rate of 5.07% to 5.13%; collateralized by 6 Model Home properties. |  |  | 851,682 |  |  |  | - |
Subtotal, model home. properties |  |  | 12,242,883 |  |  |  | 12,438,797 |
|  | $ | 88,911,866 |  |  | $ | 89,551,724 |
(1) | In the quarter ended September 30, 2013, the Company determined that an additional impairment existed on its Havana Parker property and recorded an asset impairment of $1.5 million. At December 31, 2013, the book value of the property was $3.5 million and the property was encumbered with a CMBS loan with a balance of $3.1 million and a maturity date of July 1, 2016. The Company commenced paying the net cash flow from the property in order to get the loan assigned to the proper Servicing Agent qualified to negotiate a modification of the loan. The net cash flow is substantially less than the monthly payment due. The Company has made reduced mortgage payments for the previous five (5) mortgage payments. In May 2013, months before the decision to pay only the net cash flow generated by the Property, the Company engaged a third party consultant with experience in modification of CMBS loans to have the terms of the loan modified by the lender on the property. Negotiations with the lender are currently ongoing. However, on March 4, 2014, the Company received a notice of foreclosure from the lender stating that the covenants of the deed of trust have been violated for failure to pay principal and interest when due together with all other payments provided for in the evidence of debt secured by the deed of trust and other violations. The notice also included a Notice of Sale of the real property to be held on June 25, 2014. We expect that the debt service requirements will be reduced and term of the loan will be extended or we will be allowed to pay off the loan at a discounted amount prior to the date of sale. We have evaluated the potential loss contingency in accordance with generally accepted accounting principles and concluded that it is not likely at this time that the Company will experience further losses. However, if the negotiations are not successful, the Lender may move forward with the court action and foreclose on the property. The loan on the Havana Parker property is non-recourse. Except as noted above, the Company is in compliance with all conditions and covenants of its mortgage notes payable.
From the time that the Company commenced paying only net cash flow, scheduled payments through March 31, 2014 totaled approximately $201,000 and the Company paid approximately $27,000. The Company has accrued all interest and late charges through March 31, 2014.
Scheduled Principal Payments of Mortgage Notes Payable | Scheduled principal payments of mortgage notes payable as of March 31, 2014 is as follows:
Years Ending: |  | NetREIT, Inc. Principal Payments (1) |  |  | Model Home Properties Principal Payments |  |  | Scheduled Principal Payments |
Nine months remaining in 2014 |  | $ | 1,428,110 |  |  | $ | 519,092 |  |  | $ | 1,947,202 |
2015 |  |  | 16,462,833 |  |  |  | 717,659 |  |  |  | 17,180,492 |
2016 |  |  | 9,424,380 |  |  |  | 2,057,598 |  |  |  | 11,481,978 |
2017 |  |  | 1,411,509 |  |  |  | 2,845,196 |  |  |  | 4,256,705 |
2018 |  |  | 6,213,426 |  |  |  | 4,489,164 |  |  |  | 10,702,590 |
Thereafter |  |  | 41,728,725 |  |  |  | 1,614,174 |  |  |  | 43,342,899 |
Total |  | $ | 76,668,983 |  |  | $ | 12,242,883 |  |  | $ | 88,911,866 |

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- Definition Tabular disclosure of the aggregate amount of payments due on known contractual obligations for the five years following the date of the latest balance sheet and the combined aggregate amount of maturities of known contractual obligations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 303 -Paragraph a -Subparagraph 5 + Details
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