
	Outstanding loan amount (a)				Maximum loan commitment		Interest rate			Interest compounding
Development Project	December 31, 2021		December 31, 2020
Delray Beach Plaza	$	—	$	14,289	$	17,000	15.0	%	(b)	Annually
Interlock Commercial	95,379		85,318		107,000		15.0	%	(c)	None
Nexton Multifamily	23,567		—		22,315		11.0	%		Annually
Solis Apartments at Interlock	—		28,969		41,100		13.0	%		Annually
Total mezzanine	118,946		128,576		$	187,415
Other notes receivable	7,234		6,809
Notes receivable guarantee premium	1,243		2,631
Allowance for credit losses	(994)		(2,584)
Total notes receivable	$	126,429	$	135,432

Interest on the mezzanine loans and preferred equity is accrued and funded utilizing the interest reserves for each loan, which are components of the respective maximum loan commitments, and such accrued interest is added to the loan receivable balances. The Company recognized interest income for the years ended December 31, 2021, 2020, and 2019 as follows (in thousands):


	Years Ended December 31,
Development Project	2021			2020			2019
1405 Point	$	—		$	—		$	783
The Residences at Annapolis Junction	—			2,468		(a)(b)	8,776		(b)
North Decatur Square	—			—			1,509
Delray Beach Plaza	—			489		(a)	1,622
Nexton Square	—			1,177			1,962
Interlock Commercial	12,769		(c)	12,267		(c)	6,142		(c)
Nexton Multifamily	1,252			—			—
Solis Apartments at Interlock	4,005		(d)	3,382			2,333
Total mezzanine	18,026			19,783			23,127
Other interest income	431			58			88
Total interest income	$	18,457		$	19,841		$	23,215

(b) Includes amortization of the $5.0 million loan modification fee paid by the borrower in November 2018. Additionally, the 2020 and 2019 amounts include $1.5 million and $0.5 million, respectively, of interest income recognition relating to an exit fee that was due upon repayment of the loan.

(c) The amounts of 2021, 2020 and 2019 include $2.0 million, $2.3 million and $0.6 million, respectively, of interest income recognition relating to an exit fee that is due upon repayment of the loan.

On October 27, 2017, the Company invested in the development of an estimated $20.0 million Whole Foods-anchored center located in Delray Beach, Florida. The Company's investment was in the form of a mezzanine loan of up to $13.1 million to the developer, Delray Plaza Holdings, LLC ("DPH"). The Company has agreed to guarantee payment of up to $4.8 million of the senior construction loan. On January 8, 2019, this loan was modified to increase the maximum amount of the loan to $15.0 million and the payment guarantee amount increased to $5.2 million. The mezzanine loan bears interest at a rate of 15.0% per annum.

During 2020, the Delray Beach Plaza loan was modified to (i) increase the maximum amount of the loan to $17.0 million, with $2.0 million of additional funds borrowed at an interest rate of 6% in order to fund final development activities, (ii) extend the maturity date to April 1, 2020, and (iii) require the borrower to tender 125,843 Class A Units that were pledged as collateral for this loan and establish a $2.5 million reserve account to be used for certain unpaid development project costs.

On February 26, 2021, the Company acquired Delray Beach Plaza, a Whole Foods-anchored retail property located in Delray Beach, Florida for a contract price of $27.6 million plus capitalized transaction costs of $0.2 million. The developer of this property repaid the Company's mezzanine note receivable of $14.3 million at the time of the acquisition, which consisted of $12.3 million of principal and $2.0 million of accrued interest.

In October 2018, the Company financed a bridge loan with a maximum commitment of $4.0 million to The Interlock, LLC ("Interlock"), the developer of the office and retail components of The Interlock, a new mixed-use public-private partnership with Georgia Tech in West Midtown Atlanta. This loan was subsequently modified as described below.

On December 21, 2018, the Company entered into a mezzanine loan agreement with Interlock for a maximum principal amount of $67.0 million and a total maximum commitment, including accrued interest reserves, of $95.0

million. The previous loan was repaid from proceeds of the mezzanine loan. The mezzanine loan bears interest at a rate of 15.0% per annum and matures at the earlier of (i) 24 months after the original maturity date or earlier termination date of the senior construction loan or (ii) any sale, transfer, or refinancing of the project. In the event that the maturity date is established as being 24 months after the original maturity date or earlier termination date of the senior construction loan, Interlock will have the right to extend the maturity date for 5 years.

On April 19, 2019, the borrower executed its senior construction loan, and the Company's payment guarantee of up to $30.7 million became effective. See Note 15 for additional information. See Note 18 for additional discussion.

In May 2020, the Company modified the Interlock Commercial loan to allow for an additional $8.0 million of loan funding; this additional loan funding may be available for cost overruns as well as the building of townhome units as an additional phase of this development project. The borrower subsequently decided to forego development of these townhome units. The borrower also modified the senior construction loan on the project.

On October 2, 2020, the Interlock Commercial loan was modified to decrease the exit fee, subject to the satisfaction of certain conditions. As a result, the exit fee for this loan may range from $6.5 million to $7.5 million. The Company has reduced its estimate of exit fees to be collected to $6.5 million and prospectively adjusted the recognition of the exit fee in interest income. The Company has recognized $4.9 million of this fee as of December 31, 2021.

In March 2021, the Company loaned an additional $7.5 million as part of the Interlock Commercial loan to fund project costs due to an additional equity requirement to reduce the senior loan. In September 2021, the loan was modified to increase the maximum loan commitment to $107.0 million, including $70.1 million of principal, and to modify and clarify certain rights and responsibilities under the loan.

Management has concluded that this entity is a VIE. Because Interlock is the developer of The Interlock, the Company does not have the power to direct the activities of the project that most significantly impact its performance. Therefore, the Company is not the project's primary beneficiary and does not consolidate the project in its consolidated financial statements.

On April 1, 2021, the Company entered into a $22.3 million preferred equity investment for the development of a multifamily property located in Summerville, South Carolina, adjacent to the Company's Nexton Square property. The investment has economic terms consistent with a note receivable, including a mandatory redemption or maturity on October 1, 2026, and it is accounted for as a note receivable. The Company's investment bears interest at a rate of 11%, compounded annually.

Management has concluded that this entity is a VIE. Because the other investor in the project, TP Nexton LLC, is the developer of Nexton Multifamily, the Company does not have the power to direct the activities of the project that most significantly impact its performance. Accordingly, the Company is not the project's primary beneficiary and does not consolidate the project in its consolidated financial statements.

On December 21, 2018, the Company entered into a mezzanine loan agreement with Interlock Mezz Borrower, LLC ("Solis Interlock"), the developer of Solis Apartments at Interlock, which is the apartment component of The Interlock. The mezzanine loan had a maximum principal commitment of $25.2 million and a total maximum commitment, including accrued interest reserves, of $41.1 million. The mezzanine loan bore interest at a rate of 13.0% per annum.

On June 7, 2021 the borrower paid off the Solis Apartments at Interlock note receivable in full. The Company received a total of $33.0 million, which consisted of $23.2 million outstanding principal, $7.4 million of accrued interest, and a prepayment premium of $2.4 million that resulted from the early payoff of the loan.

As of December 31, 2021, the Company had an outstanding payment guarantee for the senior loan on Interlock Commercial as described above. As of December 31, 2021 and 2020, the Company has recorded a guarantee liability of $1.2 million and $2.6 million, respectively, representing the unamortized fair value. This guarantee is classified as other liabilities on the Company's consolidated balance sheets, with a corresponding adjustment to the notes receivable

The Company is exposed to credit losses primarily through its mezzanine lending activities. As of December 31, 2021, the Company had two mezzanine loans, both of which are financing development projects in various stages of completion or lease-up. Each of these projects is subject to a loan that is senior to the Company’s mezzanine loan. Interest on these loans is paid in kind and is generally not expected to be paid until a sale of the project after completion of the development.

The Company updated the risk ratings for each of its notes receivable as of December 31, 2021 and obtained industry loan loss data relative to these risk ratings. Each of the outstanding loans as of December 31, 2021 was "Pass" rated. The Company’s analysis resulted in an allowance for loan losses of approximately $1.0 million as of the year ended December 31, 2021.

At December 31, 2021, the Company reported $126.4 million of notes receivable, net of allowances of $1.0 million. At December 31, 2020, the Company reported $135.4 million of notes receivable, net of allowances of $2.6 million. Changes in the allowance for the year ended December 31, 2021 and 2020 were as follows (in thousands):


	Years Ended December 31,
	2021		2020
Beginning balance	$	2,584	$	—
Cumulative effect of accounting change	—		2,825
Unrealized credit loss provision (release)	(802)		256
Extinguishment due to acquisition	(788)		(497)

Ending balance (a)	$	994	$	2,584

(a) The amount excludes immaterial amount of the provision (release) related to the unfunded commitments, which were recorded in Other liabilities on the consolidated balance sheet

During the year ended December 31, 2020, the Company placed the loans for Delray Beach Plaza and The Residences at Annapolis Junction on nonaccrual status with total amortized cost basis of $13.6 million. As a result, there was $5.1 million of interest income not recognized during the twelve months ended December 31, 2020. As of December 31, 2021, there were no loans on non-accrual status.