Investment in Mortgage Notes

Investment in mortgage notes, including related accrued interest receivable, at December 31, 2013 and 2012 consists of the following (in thousands):



		2013		2012
(1)	Mortgage note and related accrued interest receivable, 9.00%, paid in full on May 31, 2013	$	—	$	1,710
(2)	Mortgage note, 9.50%, paid in full on October 8, 2013	—		17,979
(3)	Mortgage note, 10.00%, due April 1, 2016	42,907		42,907
(4)	Mortgage note receivable and related accrued interest receivable, 5.50%, due November 1, 2016	2,511		—
(5)	Mortgage note and related accrued interest receivable, 10.00%, due November 1, 2017	2,521		2,517
(6)	Mortgage notes, 7.00% and 10.00%, due May 1, 2019	183,465		178,545
(7)	Mortgage note, 10.00%, due August 29, 2020	1,112		—
(8)	Mortgage note, 10.11%, due March 10, 2027	10,972		10,945
(9)	Mortgage notes, 10.77%, due April 3, 2027	63,500		62,500
(10)	Mortgage note, 9.98%, due October 30, 2027	47,029		45,714
(11)	Mortgage note and related accrued interest receivable, 10.65%, due June 28, 2032	36,032		36,032
(12)	Mortgage note and related accrued interest receivable, 9.50%, due September 1, 2032	19,659		19,471
(13)	Mortgage note and related accrued interest receivable, 10.25%, due October 31, 2032	22,188		22,188
(14)	Mortgage note, 10.20%, due December 19, 2032	4,509		2,550
(15)	Mortgage note and related accrued interest receivable, 9.00%, due December 31, 2032	5,717		5,787
(16)	Mortgage notes and related accrued interest receivable, 9.50%, due April 30, 2033	20,802		—
(17)	Mortgage note, 11.31%, due May 31, 2033	13,086		4,930
(18)	Mortgage note and related accrued interest receivable, 10.25%, due June 30, 2033	3,455		1,977
(19)	Mortgage note and related accrued interest receivable, 9.50%, due June 30, 2033	6,872		—
	Total mortgage notes and related accrued interest receivable	$	486,337	$	455,752

(1) The Company's first mortgage loan agreement with Starshine Charter Holdings, LLC was paid in full on May 31, 2013.

(2) The Company's first mortgage loan agreement with Cantera 30, L.P., was paid in full on October 8, 2013 with the Company's acquisition of its partner's interest in the Atlantic-EPR I joint venture. See Note 8 for further details.

(3) The Company's first mortgage loan agreement with Peak Resorts, Inc. (Peak) is secured by approximately 696 acres of development land. The note requires monthly interest payments and Peak is required to fund a debt service reserve for off-season interest payments (those due from April to December). The reserve is to be funded by equal monthly installments during the months of January, February and March. Monthly interest payments are transferred to the Company from this debt service reserve.

(4) The Company's mortgage loan agreement with Alko Ranch, LLC is secured by approximately 159 acres of land and a winery facility. The note requires monthly interest payments.

(5) The Company's mortgage loan agreement with Carneros Vintners, Inc. is secured by approximately 20 acres of land and a custom crush facility. The note requires monthly interest payments and two principal payments of $750 thousand each during the note term with a final principal payment of $1.0 million due at maturity. Pursuant to the mortgage note, a $10.0 million first mortgage ranks superior to the Company's collateral position.

(6) The Company’s mortgage loan agreements with SVVI, LLC (SVVI) are secured by one water-park and adjacent land in Kansas City, Kansas as well as two other water-parks located in New Braunfels and South Padre Island, Texas. The mortgage notes have cross-default and cross-collateral provisions. Pursuant to the mortgage on the Texas properties, only a seasonal line of credit secured by the Texas parks totaling not more than $7.0 million at any time ranks superior to the Company’s collateral position. The note requires monthly interest payments and SVVI is required to fund a debt service reserve for off-season interest payments (those due from September to May). The reserve is to be funded by equal monthly installments during the months of June, July and August. Monthly interest payments are transferred to the Company from this debt service reserve. The mortgage loan agreements also contain certain participating interest and note pay-down provisions. During the years ended December 31, 2013, 2012 and 2011, the Company recognized $923 thousand, $862 thousand and $451 thousand of participating interest income, respectively. SVV I, LLC is a VIE, but it was determined that the Company was not the primary beneficiary of this VIE. The Company’s maximum exposure to loss associated with SVVI, LLC is limited to the Company’s outstanding mortgage note and related accrued interest receivable.

(7) The Company's first mortgage loan agreement with CBK Lodge, LP and CBH20, LP is secured by development land adjacent to the Company's Camelback Mountain Resort that is expected to be developed into a 453 room Wilderness Lodge hotel, with an attached 125,000 square foot indoor waterpark, to be located at the base of the mountain. Interest accrues at a rate of 10.00% while the property is under construction. Upon completion of the indoor waterpark hotel, it is expected that this investment will be incorporated into the triple net lease of the Camelback Mountain Resort, with an initial term of 20 years from the completion date.

(8) The Company's first mortgage loan agreement with SNH Development, Inc. is secured by a ski resort located in Bennington, New Hampshire with a total of 308 acres. This loan is guaranteed by Peak, which operates the property. The note requires monthly interest payments and Peak is required to fund a debt service reserve for off-season interest payments (those due from April to December). The reserve is to be funded by equal monthly installments during the months of January, February and March. Monthly interest payments are transferred to the Company from this debt service reserve. Annually, this interest rate increases based on a formula dependent in part on increases in the CPI.

(9) The Company's first mortgage loan agreements with Peak are secured by two ski resorts located in Vermont and New Hampshire. Mount Snow is approximately 2,378 acres and is located in both West Dover and Wilmington, Vermont. Mount Attitash is approximately 1,250 acres and is located in Bartlett, New Hampshire. The note requires monthly interest payments and Peak is required to fund a debt service reserve for off-season interest payments (those due from April to December). The reserve is to be funded by equal monthly installments during the months of January, February and March. Monthly interest payments are transferred to the Company from this debt service reserve. Annually, this interest rate increases based on a formula dependent in part on increases in the CPI.

(10) The Company's first mortgage loan agreement with Peak is secured by seven ski resorts located in Missouri, Indiana, Ohio and Pennsylvania with a total of approximately 1,431 acres. The note requires monthly interest payments and Peak is required to fund a debt service reserve for off-season interest payments (those due from April to December). The reserve is to be funded by equal monthly installments during the months of January, February and March. Monthly interest payments are transferred to the Company from this debt service reserve. Annually, this interest rate increases based on a formula dependent in part on increases in the CPI.

(11) The Company's first mortgage loan agreement with Montparnasse 56 USA is secured by the observation deck of the John Hancock building in Chicago, Illinois. This note requires monthly interest payments.

(12) The Company's first mortgage loan agreement with Basis Schools, Inc. is secured by a six story public charter school and the underlying land with approximately 40,000 square feet located in Washington D.C. The note bears interest beginning at 9.0% with increases of 0.5% every four years and requires monthly interest payments. The note has an effective interest rate of approximately 9.3%, which is net of a 2% servicer fee to HighMark School Development (HighMark).

(13) The Company's first mortgage loan agreement with Fiber Mills, LLC and Music Factory Condominiums, LLC is secured by the North Carolina Music Factory located in Charlotte, North Carolina which is an existing entertainment retail center that includes live performance and other dining and entertainment tenants. The note bears interest beginning at 10.25% with increases of 1.0% every five years and requires monthly interest payments. The note contains an option to purchase the property for a period of time during 2015 at a price based on a multiple of the property's adjusted net operating income as defined in the agreement.

(14) The Company's first mortgage loan agreement with Peak is secured by a ski resort located in Chesterland, Ohio with approximately 125 acres. The note requires monthly interest payments and Peak is required to fund a debt service reserve for off-season interest payments (those due from April to December). The reserve is to be funded by equal monthly installments during the months of January, February and March. Monthly interest payments are transferred to the Company from this debt service reserve. Annually, this interest rate increases based on a formula dependent in part on increases in the CPI.

(15) The Company's first mortgage loan agreement with LBE Investments, Ltd. is secured by a charter school property located in Queen Creek, Arizona. The note is fully amortizing and requires monthly principal and interest payments of $52 thousand.

(16) The Company's first mortgage loan agreements with LBE Investments, Ltd. are secured by three charter school properties under development located in Gilbert and Queen Creek, Arizona. The notes bear interest beginning at 9.50% with increases of 0.5% every five years. Upon completion of construction, the notes require monthly payments of principal and interest based on a 25 year amortization schedule.

(17) The Company's first mortgage loan agreement with TopGolf USA Austin is secured by a recreation facility located in Austin, Texas. The note is fully amortizing and requires monthly principal and interest payments of $141 thousand.

(18) The Company's first mortgage loan agreement with UME Preparatory Academy is secured by approximately 28 acres of land and a public charter school property located in Dallas, Texas. The note bears interest beginning at 10.25% with increases of 0.5% every five years and requires monthly interest payments. The note has an effective interest rate of approximately 9.9%, which is net of a 2% servicer fee to HighMark.

(19) The Company's first mortgage loan agreement with Beloved Community Charter School, Inc. is secured by a charter school property located in Jersey City, New Jersey. The note bears interest beginning at 9.50% with increases of 0.5% every five years and requires monthly interest payments.

Principal payments and related accrued interest due on mortgage notes receivable subsequent to December 31, 2013 are as follows (in thousands):



	Amount
Year:
2014	$	751
2015	878
2016	46,297
2017	1,154
2018	168
Thereafter	437,089
Total	$	486,337