5. Notes Receivable

Beginning in 2019, the Company has formed certain joint ventures (collectively, the “NR Joint Ventures”) between wholly-owned subsidiaries of the Operating Partnership (collectively, the “NR Subsidiaries”) and affiliates of the Sponsor (the “NR Affiliates”) which have originated nonrecourse loans (collectively, the “Joint Venture Promissory Notes”) to unaffiliated third-party borrowers (collectively, the “Joint Venture Borrowers”).

The NR Subsidiaries and NR Affiliates have varying ownership interests in the NR Joint Ventures and certain other wholly-owned subsidiaries of the Operating Partnership serve as the manager and are the sole decision-maker for each of the NR Joint Ventures.

The Company has determined that the NR Joint Ventures are VIEs and the NR Subsidiaries are the primary beneficiaries. Since the NR Subsidiaries are the primary beneficiaries, beginning on the applicable date of formation, the Company has consolidated the operating results and financial condition of the NR Joint Ventures and accounted for the respective ownership interests of the NR Affiliates as noncontrolling interests.

The Joint Venture Promissory Notes provide for monthly interest at a prescribed variable rate, subject to a floor. In connection with funding of the Joint Venture Promissory Notes, the NR Joint Ventures have received origination fees (1.00% - 1.50%) based on the principal amount of the loan and retained a portion of the loan proceeds to establish a reserve for interest and other items (the “Loan Reserves”). The Joint Venture Promissory Notes are recorded in notes receivable, net on the consolidated balance sheets.

The Joint Venture Promissory Notes generally have an initial term of one year and may provide for an additional one-year extension option subject to satisfaction of certain prescribed conditions, including the funding of an additional reserve for interest and payment of an extension fee. The Joint Venture Promissory Notes are collateralized by either the membership interests of the Joint Venture Borrowers in the borrowing entity or the underlying real property being developed by the Joint Venture Borrower.

The origination fees received are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are amortized into interest income, using a straight-line method that approximates the effective interest method, over the initial term of the Joint Venture Promissory Notes. The Loan Reserves are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are applied against the monthly interest due over the initial term.

The Notes Receivable are summarized as follows:


	Company's		Original				Initial	Contractual	As of September 30, 2019
	Ownership		Loan	Origination		Origination	Maturity	Interest	Outstanding				Unamortized
Joint Venture/Lender	Percentage		Amount	Fee		Date	Date	Rate	Principal		Reserves		Origination Fee		Carrying
LSC 162nd Capital I LLC	45.45	%	4,234	1.50	%	February 5, 2019	March 1,2020	Libor plus 7.50% (Floor of 10%)	$	4,234	$	(191)		(22)	$	4,021
LSC 162nd Capital II LLC	45.45	%	9,166	1.50	%	February 5, 2019	March 1,2020	Libor plus 7.50% (Floor of 10%)		9,166		(413)		(48)		8,705
LSC 47-16 Greenpoint LLC	50	%	13,000	1.00	%	April 5, 2019	April 4, 2020	Libor plus 5.75% (Floor of 8.25%)		13,000		(161)		(66)		12,773
LSC 1543 7th LLC	50	%	20,000	1.00	%	August 27, 2019	August 26, 2020	Libor plus 5.15% (Floor of 7.65%)		20,000		(895)		(181)		18,924
LSC 1650 Lincoln LLC	50	%	24,000	1.00	%	August 27, 2019	August 26, 2020	Libor plus 5.15% (Floor of 7.65%)		24,000		(1,074)		(217)		22,709
Total									$	70,400	$	(2,734)	$	(534)	$	67,132

The following summarizes the interest earned (included in interest and dividend income on the consolidated statements of operations) for each of the Joint Venture Promissory Notes during the periods indicated:


	For the Three Months		For the Three Months		For the Nine Months		For the Nine Months
	Ended		Ended		Ended		Ended
Joint Venture/Lender	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
LSC 162nd Capital I LLC	$	118	$	—	$	321	$	—
LSC 162nd Capital II LLC		269		—		695		—
LSC 47-16 Greenpoint LLC		313		—		597		—
LSC 1543 7th LLC		168		—		168		—
LSC 1650 Lincoln LLC		201		—		202		—
Total	$	1,069	$	—	$	1,983	$	—