Notes Receivable

9 Months Ended

Sep. 30, 2013

Notes Receivable

Notes Receivable

3. Notes Receivable

Notes receivables consist of various loans and line of credit agreements with certain operators.

During the nine months ended September 30, 2013, we received $2,372,000 for the early repayment of an 8.5% term loan. During the nine months ended September 30, 2013 and 2012, we received, including the repayment previously discussed, $2,716,000 and $273,000, respectively, in principal payments and we funded $795,000 and $2,461,000, respectively, under our notes receivable.

During the three months ended September 2013, we committed to fund two loans up to $400,000 each with interest at 12% maturing in September 2017. At September 30, 2013, including the two new loans previously discussed, we had ten loans and line of credit agreements with a total commitment to fund $2,325,000. As of September 30, 2013, we funded $615,000 under these commitments and we have a remaining commitment of $1,710,000. These loans and line of credit commitments have interest rates ranging from 9.0% to 12.0% and maturities ranging from 2013 to 2017.

In October 2013, we entered into a new agreement to fund two pre-development loans of $325,000 each to facilitate the site selection and pre-construction services for the future development of two memory care properties.  The initial rate of each loan is 12%, increasing by 25 basis points per year.  The maturity date is the earlier of the acquisition of the land or October 2015.  As a result of this commitment, we have 12 loans and line of credit agreements with a total commitment of $2,975,000 and we have a remaining commitment balance of $2,360,000.