5.Mortgage Loans

Griffin’s mortgage loans, which are nonrecourse, consist of:

	Aug. 31, 2015		Nov. 30, 2014

5.73%, due August 1, 2015	$	—	$	18,189
Variable rate mortgage, due October 2, 2017*	6,262		6,394
Variable rate mortgage, due February 1, 2019*	10,681		10,888
Variable rate mortgage, due August 1, 2019*	7,550		7,691
Variable rate mortgage, due January 27, 2020*	3,759		3,848
Variable rate mortgage, due September 1, 2023*	—		8,875
Variable rate mortgage, due January 2, 2025*	19,494		—
5.09%, due July 1, 2029	7,478		7,750
5.09%, due July 1, 2029	6,304		6,533
4.33%, due August 1, 2030	18,000		—

Total nonrecourse mortgages	$	79,528	$	70,168

* Griffin entered into interest rate swap agreements effectively to fix the interest rates on these loans (see below).

On July 29, 2015, a subsidiary of Griffin closed on a new nonrecourse mortgage with 40|86 Mortgage Capital, Inc. (“the 40|86 Mortgage”) for $18,000. The 40|86 Mortgage refinanced an existing 5.73% nonrecourse mortgage which was due on August 1, 2015 and was collateralized by three industrial buildings totaling approximately 392,000 square feet (“75 International Drive,” “754 Rainbow Road” and “758 Rainbow Road”) in New England Tradeport, Griffin’s industrial park located in Windsor and East Granby, Connecticut. The 40|86 Mortgage is collateralized by the same three properties. Griffin received proceeds of $14,875 at closing (before transaction costs), which were applied to the payoff of the maturing existing mortgage of $17,891. The remaining $3,125 of loan proceeds were placed in escrow at closing. As per the terms of the 40|86 Mortgage, $2,500 of the escrowed proceeds are expected to be released to Griffin in the 2015 fourth quarter as the tenant that was leasing approximately 88,000 square feet on a month-to-month basis in 754 Rainbow Road has extended into a long-term lease for that space. $600 of mortgage proceeds deposited into escrow will be released to Griffin when tenant improvement work for the full building tenant in 758 Rainbow Road is completed and $25 placed in escrow was released subsequent to August 31, 2015 upon renewal of insurance coverage on the mortgaged properties. The 40|86 Mortgage has a fifteen year term with monthly payments based on a thirty year amortization schedule. The interest rate for the 40|86 Mortgage is 4.33%.

On December 31, 2014, two subsidiaries of Griffin closed on a new nonrecourse mortgage (“the 2025 First Niagara Mortgage”) for $21,600. The 2025 First Niagara Mortgage refinanced an existing mortgage with First Niagara Bank (“First Niagara”) which was due on September 1, 2023 and was collateralized by an approximately 228,000 square foot industrial building (“4275 Fritch Drive”) in Lower Nazareth, Pennsylvania. The 2025 First Niagara Mortgage is collateralized by 4275 Fritch Drive along with an adjacent approximately 303,000 square foot industrial building (“4270 Fritch Drive”). Griffin received net proceeds of $10,891 at closing (before transaction costs), in addition to $8,859 used to refinance the existing mortgage with First Niagara. The remaining $1,850 of loan proceeds will not be advanced until a portion of the remaining vacant space of approximately 101,000 square feet in 4270 Fritch Drive is leased. The 2025 First Niagara Mortgage has a ten year term with monthly payments based on a twenty-five year amortization schedule. The interest rate for the 2025 First Niagara Mortgage is a floating rate of the one month LIBOR rate plus 1.95%. At the time the 2025 First Niagara Mortgage closed, Griffin entered into an interest rate swap agreement with First Niagara that, combined with an existing interest rate swap agreement with First Niagara, effectively fixes the rate of the 2025 First Niagara Mortgage at 4.43% over the mortgage loan’s ten year term.

As of August 31, 2015, Griffin was a party to several interest rate swap agreements related to its variable rate nonrecourse mortgages on certain of its real estate assets. Griffin accounts for its interest rate swap agreements as effective cash flow hedges (see Note 3). No ineffectiveness on the cash flow hedges was recognized as of August 31, 2015 and none is anticipated over the term of the agreements. Amounts in accumulated other comprehensive income (loss) will be reclassified into interest expense over the term of the swap agreements to achieve fixed rates on each mortgage. None of the interest rate swap agreements contain any credit risk related contingent features. In the 2015 and 2014 nine month periods, Griffin recognized losses (included in other comprehensive loss) before taxes of $812 and $619, respectively, on its interest rate swap agreements.

As of August 31, 2015, $1,068 was expected to be reclassified over the next twelve months from accumulated other comprehensive loss to interest expense. As of August 31, 2015, the net fair value of Griffin’s interest rate swap agreements was $2,251 and is included in other liabilities on Griffin’s consolidated balance sheet.

On September 1, 2015, a subsidiary of Griffin closed on a new nonrecourse mortgage with Webster Bank (the “2015 Webster Mortgage”) for $14,100. The 2015 Webster Mortgage is collateralized by an approximately 280,000 square foot industrial building in the Lehigh Valley of Pennsylvania (“5220 Jaindl Boulevard”) that was completed and placed in service at the end of the 2015 third quarter. Griffin received proceeds of $11,500 at closing (before transaction costs), with the remaining $2,600 of loan proceeds to be advanced when, and if, the tenant that is leasing approximately 196,000 square feet in 5220 Jaindl Boulevard exercises its option to lease the balance of the building or when, and if, another tenant leases the currently unleased space on terms acceptable to Webster Bank. The tenant’s option to lease the balance of the building expires December 15, 2015. The 2015 Webster Mortgage has a ten year term with monthly payments based on a twenty-five year amortization schedule. The interest rate for the 2015 Webster Mortgage is a floating rate of the one month LIBOR rate plus 1.65%. At the time the 2015 Webster Mortgage closed, Griffin also entered into an interest rate swap agreement with Webster Bank for a notional principal amount of $11,500 at inception to fix the interest rate on the funds advanced under the 2015 Webster Mortgage at 3.77%.