NOTES PAYABLE

The following table summarizes the terms and amounts of the Company’s notes payable at September 30, 2015 and December 31, 2014 (in thousands):



Description	Interest Rate		Maturity	September 30, 2015		December 31, 2014
Post Oak Central mortgage note	4.26	%	2020	$	182,618	$	185,109
Credit Facility, unsecured	1.29	%	2019	134,000		140,200
The American Cancer Society Center mortgage note	6.45	%	2017	129,794		131,083
Promenade mortgage note	4.27	%	2022	108,899		110,946
191 Peachtree Tower mortgage note	3.35	%	2018	100,000		100,000
816 Congress mortgage note	3.75	%	2024	85,000		85,000
Meridian Mark Plaza mortgage note	6.00	%	2020	25,088		25,408
The Points at Waterview mortgage note	5.66	%	2016	14,171		14,598
				$	779,570	$	792,344

Fair Value

At September 30, 2015 and December 31, 2014, the aggregate estimated fair values of the Company's notes payable were $806.0 million and $835.4 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 relationships. These fair value calculations are considered to be Level 2 under the guidelines as set forth in 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, 2015 and 2014, interest expense was as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Total interest incurred	$	8,696		$	7,667		$	25,959		$	22,787
Interest capitalized	(1,023		)	(850		)	(2,740		)	(1,833		)
Total interest expense	$	7,673		$	6,817		$	23,219		$	20,954

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.

Subsequent Event

On October 1, 2015, the Company prepaid, without penalty, the $14.2 million The Points at Waterview mortgage note. The note was scheduled to mature on January 1, 2016.