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Note Payable
3 Months Ended
Mar. 31, 2012
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]
NOTE PAYABLE
On December 17, 2010, Wells VAF I entered into an agreement with NXT Capital, LLC ("NXT Capital") for a loan in the amount of up to $30 million (the "NXT Loan"). As of March 31, 2012, the outstanding balance on the NXT Loan was approximately $19.2 million. The NXT Loan, which matures on December 16, 2013, bears interest at the greater of (i) one-month London Interbank Offered Rate ("LIBOR") plus a margin of 3.75% or (ii) 7.25%. As of March 31, 2012, the NXT Loan was secured by the Nathan Lane Building, the Commerce Street Building, and the Parkway at Oak Hill Buildings. Except as permitted with respect to a partial release, Wells VAF I may prepay the NXT Loan in full, but not in part, provided an exit fee equal to 1% of the outstanding loan amount and a minimum interest recovery amount are paid. At closing, $19 million was funded by NXT Capital, $10 million remained available for costs and expenses incurred in connection with certain future tenant improvements and leasing commissions approved by NXT Capital, and $1 million was reserved by NXT Capital for the payment of monthly interest on the loan (the "Interest Reserve"). The NXT Loan requires monthly interest-only payments from Wells VAF I's net cash flow. To the extent net cash flow is insufficient to fully cover the payment of accrued interest, funds remaining in the Interest Reserve will be disbursed to pay such difference. If no funds remain in the Interest Reserve, any amounts in excess of net cash flow must be funded with Wells VAF I's own funds. Please refer to Note 8 "Subsequent Event" for further explanation regarding the repayment of the outstanding balance of the NXT Loan in May 2012.
As of March 31, 2012, the NXT Loan incurred interest at a rate of 7.25%. Wells VAF I paid cash for interest expense on its notes payable of approximately $353,000 and $346,000 during the three months ended March 31, 2012 and 2011, respectively. During the periods presented, Wells VAF I did not capitalize any interest expense related to the NXT Loan.