Note 8 – Mortgages Payable

The following table summarizes certain information as of December 31, 2015 and 2014, with respect to the Company’s indebtedness (amounts in thousands).

	Outstanding Principal				As of December 31, 2015
Property	December 31, 2015		December 31, 2014		Interest Rate			Fixed/ Floating		Maturity Date
ARIUM Grandewood	$	29,444	$	29,444		1.91	%	Floating	⁽¹⁾	December 1, 2024
ARIUM Palms		24,999		-		2.46	%	Floating	⁽²⁾	September 1, 2022
Ashton I		31,900		-		4.67	%	Fixed		December 1, 2025
Ashton II		15,270		-		2.92	%	Floating	⁽³⁾	January 1, 2026
Enders Place at Baldwin Park ⁽⁴⁾		25,155		25,475		4.30	%	Fixed		November 1, 2022
Fox Hill		26,705		-		3.57	%	Fixed		April 1, 2022
Lansbrook Village		43,628		42,357		4.41	%	Blended	⁽⁵⁾	March 31, 2018
MDA Apartments		37,600		37,600		5.35	%	Fixed		January 1, 2023
Park & Kingston		15,250		-		3.21	%	Fixed		April 1, 2020
Sorrel		38,684		-		2.53	%	Floating	⁽⁶⁾	May 1, 2023
Sovereign		28,880		-		3.46	%	Fixed		November 10, 2022
Springhouse at Newport News		22,176		22,515		5.66	%	Fixed		January 1, 2020
Village Green of Ann Arbor		42,326		43,078		3.92	%	Fixed		October 1, 2022
Total		382,017		200,469
Fair value adjustments		1,620		874
Total continuing operations		383,637		201,343
North Park Towers - held for sale		-		11,500
Total	$	383,637	$	212,843

⁽¹⁾ ARIUM Grandewood Senior Loan bears interest at a floating rate of 1.67% plus one-month LIBOR. At December 31, 2015, the interest rate was 1.91%.

⁽²⁾ ARIUM Palms loan bears interest at a floating rate of 2.22% plus one-month LIBOR. At December 31, 2015, the interest rate was 2.46%.

⁽³⁾ Ashton II loan bears interest at a floating rate of 2.62% plus one-month LIBOR. At December 31, 2015, the interest rate was 2.92%.

⁽⁴⁾ The principal includes a $17.2 million loan at a 3.97% interest rate and an $8.0 million supplemental loan at a 5.01% interest rate.

⁽⁵⁾ The principal balance includes the initial advance of $42.0 million at a fixed rate of 4.45% and an additional advance of $1.6 million that bears interest at a floating rate of three-month LIBOR plus 3.00%. At December 31, 2015, the additional advance had an interest rate of 3.38%.

⁽⁶⁾ Sorrel loan bears interest at a floating rate of 2.29% plus one-month LIBOR. At December 31, 2015, the interest rate was 2.53%.

Springhouse at Newport News Mortgage Payable

On December 3, 2009, the Company, through an indirect subsidiary (the “Springhouse Borrower”), entered into a $23.4 million loan with CW Capital LLC, a Massachusetts limited liability company, which is secured by the Springhouse property. The loan was subsequently sold to the Federal Home Loan Mortgage Corporation (Freddie Mac). The loan matures on January 1, 2020 and bears interest at a fixed rate of 5.66% per annum. Monthly payments were interest-only for the first two years of the loan. Yield maintenance payments will be required to the extent the loan is prepaid before the sixth month prior to the maturity date; during the period from the sixth month prior to the maturity date to the third month prior to the maturity date, a prepayment premium of 1% of the loan amount will be required, and thereafter the loan may be prepaid without penalty. The loan is nonrecourse to the Springhouse Borrower, with recourse carve-outs for certain deeds, acts or failures to act on the part of the Springhouse Borrower or any of its officers, members, managers or employees.

Enders Mortgage Payable

On October 2, 2012, the Company, through an indirect subsidiary (the “Enders Borrower”), entered into a $17.5 million loan with Jones Lang LaSalle Operations, LLC, an Illinois limited liability company, which is secured by the Enders property. The loan was subsequently assigned to Freddie Mac. The loan matures on November 1, 2022 and bears interest at a fixed rate of 3.97% per annum, with interest-only payments due for the first two years and fixed monthly payments of approximately $83,245, based on a 30-year amortization schedule, due thereafter. Yield maintenance payments will be required to the extent the loan is prepaid before the sixth month prior to the maturity date; during the period from the sixth month prior to the maturity date to the third month prior to the maturity date, a prepayment premium of 1% of the principal being paid will be required, and thereafter the loan may be prepaid without penalty. The loan is nonrecourse to the Enders Borrower, with recourse carve-outs for certain deeds, acts or failures to act on the part of the Enders Borrower or any of its officers, members, managers or employees.

On September 10, 2014, the Company, though an indirect subsidiary (the “Enders Borrower”), entered into a supplemental $8 million loan with Jones Lang LaSalle Operations, LLC, an Illinois limited liability company, which is secured by the Enders property. The loan was subsequently assigned to Freddie Mac. This loan matures on November 1, 2022 and bears interest at a fixed rate of 5.01% per annum, with interest-only payments due for the first year and fixed monthly payments of approximately $42,995, based on a 30-year amortization schedule, due thereafter. Yield maintenance payments will be required to the extent prepaid before the sixth month prior to the maturity date; during the period from the sixth month prior to the maturity date to the third month prior to the maturity date, a prepayment premium of 1% of the principal being prepaid will be required, and thereafter the loan may be prepaid without penalty. The loan is nonrecourse to the Enders Borrower, with recourse carve-outs for certain deeds, acts or failures to act on the part of the Enders Borrower or any of its officers, members, managers or employees.

MDA Mortgage Payable

On December 17, 2012, the Company, through an indirect subsidiary (the “MDA Borrower”), entered into a $37.6 million loan with MONY Life Insurance Company which is secured by the MDA property. The loan matures on January 1, 2023 and bears interest at a fixed rate of 5.35% per annum, with three years of interest-only payments due initially and fixed monthly payments of approximately $209,964, based on a 30-year amortization schedule, due thereafter. The loan may be prepaid, in full, at any time beginning in the third year of the term on at least 30 business days prior notice and the payment of a prepayment premium equal to the greater of (a) 1% of the principal balance and (b) a yield maintenance amount determined under the promissory note. The loan is nonrecourse to the MDA Borrower, with recourse carve-outs for certain deeds, acts or failures to act on the part of the MDA Borrower or any of its officers, members, managers or employees.

Village Green Mortgage Payable

On September 12, 2012, the Company, through an indirect subsidiary (the “Village Green Borrower”), entered into a $43.2 million loan with KeyCorp Real Estate Capital Markets which is secured by the Village Green property. The loan was subsequently assigned to Freddie Mac. The loan matures on October 1, 2022 and bears interest at a fixed rate of 3.92% per annum, with interest-only payments due until November 1, 2014 and fixed monthly payments of $204,256, based on a 30-year amortization schedule, due thereafter. Yield maintenance payments will be required to the extent the loan is prepaid before the sixth month prior to the maturity date; during the period from the sixth month prior to the maturity date to the third month prior to the maturity date, a prepayment premium of 1% of the principal being prepaid will be required, and thereafter the loan may be prepaid without penalty. The loan is nonrecourse to the Village Green Borrower, with recourse carve-outs for certain deeds, acts or failures to act on the part of the Village Green Borrower or any of its officers, members, managers or employees.

Lansbrook Mortgage Payable

On March 21, 2014, the Company, through an indirect subsidiary (the “Lansbrook Borrower”), entered into a $48 million loan with General Electric Capital Corporation which is secured by Lansbrook Village. The $48.0 million is comprised of a $42.0 million initial advance and an additional $6.0 million of additional borrowing for the acquisition and improvement of additional units. At December 31, 2015, the Lansbrook Borrower has borrowed $1.6 million of the $6.0 million of additional borrowable funds. The loan matures on March 31, 2018 and bears interest at a fixed rate 4.45% per annum, with interest-only payments due until May 1, 2016 and principal payments beginning thereafter based upon a 30-year amortization schedule. Yield maintenance payments will be required to the extent the loan is prepaid before the third month prior to the maturity date and thereafter the loan may be prepaid without penalty. At the time of repayment, whether prepaid or paid at maturity, a $240,000 exit fee is due to the lender. The loan is nonrecourse to the Company and the Lansbrook Borrower, with recourse carve-outs for certain deeds, acts or failures to act on the part of the Lansbrook Borrower or any of its officers, members, managers or employees.

ARIUM Grandewood Mortgage Payable

On November 4, 2014, the Company, through an indirect subsidiary (the “ARIUM Grandewood Borrower”), entered into a $29.44 million loan with Walker & Dunlop, LLC which is secured by the ARIUM Grandewood property. The loan matures on December 1, 2024 and bears interest at a floating rate of LIBOR plus 1.67%, with interest-only payments due for the entire loan term. A prepayment premium in the amount of 5% of the principal being prepaid will be required to the extent that principal is prepaid in the first loan year; during the period from the second loan year to the fourth month prior to the maturity date, a prepayment premium of 1% of the prepayment amount will be required, and thereafter the loan may be prepaid without penalty. The loan is nonrecourse to the ARIUM Grandewood Borrower, with recourse carve-outs for certain deeds, acts or failures to act on the part of the ARIUM Grandewood Borrower or any of its officers, members, managers or employees.

North Park Towers Mortgage Payable

On December 24, 2013, the Company, through an indirect subsidiary (the “North Park Borrower”), entered into an $11.5 million loan with Arbor Commercial Mortgage, LLC which is secured by the North Park property. The loan matures on January 6, 2024 and bears interest at a fixed rate of 5.65% per annum, with interest-only payments due until February 6, 2016 and principal payments beginning thereafter based on a 30-year amortization. To the extent that principal is prepaid prior to October 6, 2023, a prepayment penalty will be required and shall be the greater of the Yield Maintenance Amount, as defined in the agreement, or 4% of the unpaid outstanding principal balance. The loan may be prepaid in full at any time between October 6, 2023 and January 6, 2024 with no prepayment penalty. The loan is nonrecourse to the North Park Borrower, with recourse carve-outs for certain deeds, acts or failures to act on the part of the North Park Borrower or any of its officers, members, managers or employees. The loan was paid off in October 2015 in conjunction with the sale of the North Park property.

Park & Kingston Mortgage Payable

On March 16, 2015, the Company, through an indirect subsidiary (the “Park & Kingston Borrower”), entered into a $15.25 million loan with the Federal National Mortgage Association (“Fannie Mae”), which is secured by Park & Kingston. The loan matures on April 1, 2020 and bears interest at a fixed rate of 3.21%, with interest-only payments due for the entire loan term. Yield maintenance payments will be required to the extent prepaid before the sixth month prior to the maturity date; during the period from the sixth month prior to the maturity date to the third month prior to the maturity date, a prepayment premium of 1% of the principal being prepaid will be required, and thereafter the loan may be prepaid without penalty. The loan is nonrecourse to the Park & Kingston Borrower with recourse carve-outs for certain deeds, acts or failures to act on the part of the Park & Kingston Borrower, or any of its officers, members, managers or employees.

Fox Hill Mortgage Payable

On March 26, 2015, the Company, through an indirect subsidiary (the “Fox Hill Borrower”), entered into a $26.7 million loan with Walker & Dunlop, LLC, which is secured by Fox Hill. The loan was subsequently assigned to Fannie Mae. The loan matures on April 1, 2022 and bears interest at a fixed rate of 3.57%, with interest-only payments due until May 1, 2019 and fixed monthly payments based on 30-year amortization thereafter. During the first 60 months of the term, the loan may be prepaid at any time with at least 30 business days prior notice and the payment of a prepayment premium equal to the greater of (i) 1% of the principal balance and (ii) a yield maintenance amount calculated as set forth in the loan agreement. After the first 60 months of the term through the fourth month prior to the end of the term, the loan may be prepaid at any time with at least 30 business days prior notice and the payment of a prepayment premium equal to 1% of the principal balance, and thereafter, the loan may be prepaid at any time at par. The loan is nonrecourse to the Company and the Fox Hill Borrower with recourse carve-outs for certain deeds, acts or failures to act on the part of the Company and the Fox Hill Borrower, or any of its officers, members, managers or employees.

Ashton I Mortgage Payable

On August 19, 2015, the Company, through an indirect subsidiary (the “Ashton I Borrower”), assumed a $31.9 million loan with Sun Life Assurance Company of Canada which is secured by Ashton I. The loan matures on December 1, 2025 and bears interest at a fixed rate of 4.67%, with interest-only payments due through December 1, 2016, and fixed monthly payments based on 30-year amortization thereafter. The loan may be prepaid in full at any time with thirty (30) days' prior written notice to the lender, and the payment of a prepayment premium equal to the greater of (i) 1.0% of the unpaid principal balance or (ii) a yield maintenance amount calculated as set forth in the loan documents. The loan is nonrecourse to the Ashton I Borrower with recourse carve-outs for certain deeds, acts or failures to act on the part of the Ashton I Borrower, or any of its officers, members, managers or employees.

ARIUM Palms Mortgage Payable

On August 20, 2015, the Company, through an indirect subsidiary (the “ARIUM Palms Borrower”), entered into a $25.0 million loan with Jones Long LaSalle Operations, L.L.C., on behalf of Freddie Mac, which is secured by ARIUM Palms. The loan matures on September 1, 2022 and bears interest on a floating basis based on LIBOR plus 2.22%, with interest-only payments due until September 1, 2019 and fixed monthly payments based on 30-year amortization thereafter. After the first 24 months of the term through the fourth month prior to the end of the term, the loan may be prepaid at any time with at least 30 business days prior notice and the payment of a make whole premium equal to 1% of the principal balance, and thereafter, the loan may be prepaid at any time at par. The loan is nonrecourse to the Company and the ARIUM Palms Borrower with recourse carve-outs for certain deeds, acts or failures to act on the part of the Company and the ARIUM Palms Borrower, or any of its officers, members, managers or employees.

Sorrel Mortgage Payable

On October 29, 2015, the Company, through an indirect subsidiary (the “Sorrel Borrower”), entered into a $38.7 million loan with CBRE Capital Markets, Inc., on behalf of Freddie Mac, which is secured by Sorrel. The loan matures May 1, 2023 and bears interest on a floating basis based on LIBOR plus 2.29%, with interest only payments until November 1, 2019, and based on 30-year amortization thereafter. After April 30, 2017 through January 31, 2023, the loan may be prepaid with a 1% make whole premium, and thereafter, the loan may be prepaid at par. The loan is nonrecourse to the Company and the Sorrel Borrower with recourse carve-outs for certain deeds, acts or failures to act on the part of the Company and the Sorrel Borrower, or any of its officers, members, managers or employees.

Sovereign Mortgage Payable

On October 29, 2015, the Company, through an indirect subsidiary (the “Sovereign Borrower”), entered into a $28.9 million loan with The Northwestern Mutual Life Insurance Company, which is secured by Sovereign. The loan matures November 10, 2022 and bears interest at a fixed rate of 3.46%, with interest only payments until October 10, 2017, and fixed monthly payments based on 30-year amortization thereafter. The loan may be prepaid with the greater of 1% prepayment fee or yield maintenance through August 10, 2022, and thereafter at par. The loan is nonrecourse to the Company and the Sovereign Borrower with recourse carve-outs for certain deeds, acts or failures to act on the part of the Company and the Sovereign Borrower, or any of its officers, members, managers or employees.

Ashton II Mortgage Payable

On December 14, 2015, the Company, through an indirect subsidiary (the “Ashton II Borrower”), entered into a $15.3 million loan with KeyBank National Association, on behalf of Fannie Mae, which is secured by Ashton II. The loan matures January 1, 2026 and bears interest on a floating basis based on LIBOR plus 2.62%, with interest only payments until January 1, 2019, and based on 30-year amortization thereafter. The loan may be prepaid through December 31, 2016 with a 5% prepayment fee, from January 1, 2017 until August 31, 2025 with a 1% prepayment fee, and thereafter at par. The loan is nonrecourse to the Company and the Ashton II Borrower with recourse carve-outs for certain deeds, acts or failures to act on the part of the Company and the Ashton II Borrower, or any of its officers, members, managers or employees.

As of December 31, 2015, contractual principal payments for the five subsequent years and thereafter are as follows (amounts in thousands):

Year	Total
2016	$	2,622
2017		3,514
2018		45,755
2019		4,701
2020		41,268
Thereafter		284,157
	$	382,017
Add: Unamortized fair value debt adjustment		1,620
Total	$	383,637

The net book value of real estate assets providing collateral for these above borrowings was $530.6 million as of December 31, 2015.