NOTES PAYABLE

The following table summarizes the terms and amounts of the Company’s notes payable at September 30, 2013 and December 31, 2012 ($ in thousands):



Description	Interest Rate		Maturity	September 30, 2013		December 31, 2012
Post Oak Central mortgage note (see discussion below)	4.26	%	2020	$	188,830	$	—
The American Cancer Society Center mortgage note	6.45	%	2017	133,112		134,243
Promenade mortgage note (see discussion below)	4.27	%	2022	114,000		—
191 Peachtree Tower mortgage note (interest only until May 1, 2016)	3.35	%	2018	100,000		100,000
Credit Facility, unsecured	1.70	%	2016	51,075		—
Meridian Mark Plaza mortgage note	6.00	%	2020	25,910		26,194
The Points at Waterview mortgage note	5.66	%	2016	15,270		15,651
Mahan Village construction facility	1.85	%	2014	14,463		13,027
Callaway Gardens	4.13	%	2013	174		172
Terminus 100 mortgage note (see discussion below)	5.25	%	2023	—		136,123
				$	642,834	$	425,410

Debt Activity

In September 2013, the Company entered into a $188.8 million non-recourse mortgage note payable secured by Post Oak Central, a 1.3 million square foot office complex in Houston, Texas. The interest rate is fixed at 4.26% and the maturity date is October 2020. In September 2013, the Company also entered into a $114.0 million non-recourse mortgage note payable secured by Promenade, a 777,000 square foot office building in Atlanta, Georgia. The interest rate is fixed at 4.27% and the maturity date is October 2022.

In February 2013, the Company effectively sold 50% of its interest in Terminus 100 to a third party. Based upon the ownership and management structure of the joint venture that owns Terminus 100 after these transactions, the Company accounts for its investment in this entity under the equity method. Therefore, the Terminus 100 mortgage note is no longer consolidated. See note 7 for further details.

Fair Value

At September 30, 2013 and December 31, 2012, the aggregate estimated fair values of the Company's notes payable were $746.4 million and $456.0 million, respectively, calculated by discounting the debt's remaining contractual cash flows at estimated rates at which similar loans could have been obtained at those respective dates. The estimate of the current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. These fair value calculations are considered to be Level 2 under the guidelines as set forth in the Financial Accounting Standards Board's Accounting Standards Codification ("ASC") 820, Fair Value Measurement, as the Company utilizes market rates for similar type loans from third party brokers.

Other Information

For the three and nine months ended September 30, 2013 and 2012, interest expense was as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Total interest incurred	$	5,268		$	6,337		$	14,602		$	19,395
Interest capitalized	(119		)	(544		)	(277		)	(1,459		)
Total interest expense	$	5,149		$	5,793		$	14,325		$	17,936

The real estate and other assets of The American Cancer Society Center (the “ACS Center”) are restricted under the ACS Center loan agreement in that they are not available to settle debts of the Company. However, provided that the ACS Center loan has not incurred any uncured event of default, as defined in the loan agreement, the cash flows from the ACS Center, after payments of debt service, operating expenses and reserves, are available for distribution to the Company.