Debt

12 Months Ended

Dec. 31, 2012

Debt [Abstract]

Debt

9. Debt

Mortgage Loans Payable

The Trust had outstanding mortgage loans payable of $280,576,000 and $230,940,000 at December 31, 2012 and 2011, respectively. The mortgage loan payments of principal and interest are generally due monthly, quarterly or semi-annually and are collateralized by applicable real estate of the Trust.

The Trust’s mortgage loans payable at December 31, 2012 and 2011 are summarized as follows (in thousands):

Location of Collateral	Maturity	Spread Over LIBOR/Prime	Interest Rate  at December 31, 2012			December 31, 2012			December 31, 2011
Amherst, NY	Oct 2013	—		5.65	%	$	15,225		$	15,682
Memphis, TN	Aug 2014	Libor + 2.5% (5)		3.00	%		13,408			—
Chicago, IL	Apr 2015	—		6.25	%		8,700			8,900
Lisle, IL (3)	Oct 2014	Libor + 2.5% (1)		2.71	%		5,752			21,000
Chicago, IL	Mar 2016	—		5.75	%		20,200			20,522
Houston, TX	Apr 2016	—		6.15	%		52,052			56,423
New York, NY	May 2016	Libor + 2.5% (2)		3.50	%		51,982			49,585
Greensboro, NC	Aug 2016	—		6.22	%		15,139			—
Cerritos, CA	Jan 2017	—		5.07	%		23,184
Lisle, IL	Mar 2017	—		5.55	%		5,543			5,600
Orlando, FL	Jul 2017	—		6.40	%		37,580			38,132
Plantation, FL	Apr 2018	—		6.48	%		10,811			10,927
Meriden, CT	Oct 2022	—		3.95	%		21,000			—
Indianapolis, IN	N/A	—		N/A			—	(4)		4,169
						$	280,576		$	230,940

(1) The loan has an interest rate cap which caps LIBOR at 1%.

(2) The loan has a LIBOR floor of 1%.

(3) The loan was previously collateralized by three properties. Two of the properties were released from the mortgage upon partial repayment in October 2012.

(4) Mortgage loan was satisfied September 2012 upon sale of Circle Tower operating property.

(5) The loan has a LIBOR floor of 0.5% and an interest rate cap which caps LIBOR at 0.5%.

The Trust determines the fair value of its mortgage loans payable using discounted cash flow analyses by discounting future cash payments at interest rates the Trust believes approximate the current market. In determining the current market rates, the Trust adds its estimate of market spreads to the quoted yields on federal government treasury securities. The inputs used in determining the estimated fair value of the Trust’s mortgage loans payable are categorized as level 3 in the fair value hierarchy. The estimated fair value of the Trust’s mortgage loans payable and revolving line of credit are less than their current carrying value by $9,653,000 and $12,604,000 at December 31, 2012 and 2011, respectively.

Non-Recourse Secured Financings

The Trust’s non-recourse secured financings at December 31, 2012 and December 31, 2011 are summarized as follows (in thousands):

Collateral	Maturity		Spread Over LIBOR/Prime			Interest Rate at December 31, 2012			December 31, 2012		December 31, 2011
Hotel Wales Loan		Oct 2013		LIBOR plus 1.25%	(1)		4.25	%	$	14,000	$	14,000
San Marbeya Loan		Jan 2015		—			4.85	%		15,150		15,150
									$	29,150	$	29,150

(1) The loan has a LIBOR floor of 3%.

The Trust determines the fair value of its secured financing using a discounted cash flow analyses by discounting future cash payments at interest rates that the Trust believes approximate the current market. In determining the current market rates, the Trust adds its estimate of market spreads to the quoted rates for recent market transactions. The inputs used in determining the estimated fair value of the Trust’s secured financings are categorized as level 3 in the fair value hierarchy. The estimated fair value of the Trust’s secured financings are greater than their carrying value by $333,000 and $152,000 at December 31, 2012 and 2011, respectively.

Recourse Secured Financings

In November 2012, the Trust obtained a $25,000,000 loan which is secured by the Queensridge loan receivable. As of December 31, 2012, the recourse secured financing has a carrying value of $23,770,000, bears interest at a rate of LIBOR plus 4.0% and matures on November 15, 2014. The inputs used in determining the estimated fair value of the Trust’s secured financings are categorized as level 3 in the fair value hierarchy. The fair value of the loan approximates its carrying value at December 31, 2012.

Notes Payable

In conjunction with the loan modification on the property located in Cerritos, California the Trust assumed a $14,500,000 B Note that bears interest at 6.6996% per annum and requires monthly payments of approximately $12,000 with the balance of the interest accruing. The loan modification agreement provides for a participation feature whereby the B Note can be fully satisfied with proceeds from the sale of the property after the Trust receives its 9.0% priority return of capital, during a specified time period as defined in the loan modification document. As of December 31, 2012, the carrying value of the participating B Note was $876,000 which approximates fair value. The inputs used in determining the estimated fair value of the Trust’s notes payable are categorized as level 3 in the fair value hierarchy.

On October 15, 2012, an entity in which the Trust holds an indirect interest executed a note payable in the amount of $1,600,000. The note bears interest at 15% per annum and matures on October 15, 2022. In the consolidation of the Trust, $800,000 of the note payable is eliminated for accounting purposes. The balance of the note as of December 31, 2012 was $800,000 which approximates fair value.