
	Outstanding loan amount (a)				Maximum loan commitment			Interest rate		Interest compounding
Development Project	December 31, 2022		December 31, 2021
City Park 2	$	19,062	$	—	$	20,594		13.0	%	Annually
Solis Gainesville II	6,638		—		19,595			14.0	%	Annually
Interlock Commercial	86,584		95,379		107,000		(b)	15.0	%	None
Nexton Multifamily	—		23,567		22,315			11.0	%	Annually

Total mezzanine	112,284		118,946		$	169,504
Constellation Energy Building note receivable	12,834		—
Other notes receivable	11,512		7,234
Notes receivable guarantee premium	701		1,243
Allowance for credit losses(c)	(1,292)		(994)
Total notes receivable	$	136,039	$	126,429

(c) The amounts as of December 31, 2022 and 2021 exclude $0.3 million and less than $0.1 million, respectively, of CECL allowance that relates to the unfunded commitments, which were recorded as a liability under Other liabilities in the consolidated balance sheets.

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, 2022, 2021, and 2020 as follows (in thousands):


	Years Ended December 31,
Development Project	2022			2021			2020

The Residences at Annapolis Junction	$	—		$	—		$	2,468	(a)(b)
City Park 2	1,038			—			—
Delray Beach Plaza	—			—			489		(a)
Solis Gainesville II	205			—			—
Nexton Square	—			—			1,177
Interlock Commercial(c)	9,870		(c)	12,769		(c)	12,267		(c)
Nexton Multifamily	5,348		(e)	1,252			—
Solis Apartments at Interlock	—			4,005		(d)	3,382
Total mezzanine	16,461			18,026			19,783
Other interest income	517			431			58
Total interest income	$	16,978		$	18,457		$	19,841

(b) Includes amortization of the $5.0 million loan modification fee paid by the borrower in November 2018. Additionally, the amount includes $1.5 million of interest income recognition relating to an exit fee that was due upon repayment of the loan.

(c) The amounts of 2022, 2021 and 2020 include $1.1 million, $2.0 million and $2.3 million, respectively, of interest income recognition relating to an exit fee that is due upon repayment of the loan.

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.

During February 2022, the Company received $13.5 million as a partial repayment of the Interlock Commercial mezzanine loan, which consisted of $11.1 million of principal and $2.4 million of interest. During March 2022, the company received $0.7 million as an additional repayment, which consisted of $0.2 million of principal and $0.5 million of interest. During September 2022, the Company received $2.7 million as an additional repayment, which consisted of $1.0 million of principal and $1.7 million of interest. During December 2022, the Company received $0.4 million as an additional repayment, which fully consisted of interest.

Management has concluded that this entity is a VIE. Because Interlock is the developer and managing member 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 had 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 bore interest at a rate of 11%, compounded annually.

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

On December 30, 2022 the Company’s preferred equity investment was redeemed in full for total consideration of $28.9 million, including $6.6 million of minimum return consisting of $3.9 million of interest and a $2.7 million prepayment premium.

On March 23, 2022, the Company entered into a $20.6 million preferred equity investment for the development of a multifamily property located in Charlotte, North Carolina. The investment has economic terms consistent with a note receivable, including a mandatory redemption or maturity on April 28, 2026, and it is accounted for as a note receivable. The Company's investment bears interest at a rate of 13%, compounded annually.

Management has concluded that this entity is a VIE. Because the other investor in the project, TP City Park 2 LLC, is the developer of City Park 2 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 October 3, 2022, the Company entered into a $19.6 million preferred equity investment for the development of a multifamily property located in Gainesville, Georgia (Solis Gainesville II). The investment has economic terms consistent with a note receivable, including a mandatory redemption or maturity on October 3, 2026, and it is accounted for as a note receivable. The Company's investment bears interest at a rate of 14%, compounded annually, with minimum interest of $5.9 million over the life of the investment.

Management has concluded that this entity is a VIE. Because the other investor in the project, TP Gainesville II LLC, is the developer and managing member of Solis Gainesville II, 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.

As of December 31, 2022, the Company had outstanding payment guarantees for the senior loans on Interlock Commercial and Harbor Point Parcel 4 as described above. As of December 31, 2022 and 2021, the Company has recorded a guarantee liability of $0.9 million and $1.2 million, respectively, representing the unamortized fair value. These guarantees are classified as other liabilities on the Company's consolidated balance sheets, with a corresponding adjustment to the notes receivable balance on the consolidated balance sheets. See Note 18 for additional information on the Company's outstanding guarantees.

The Company is exposed to credit losses primarily through its mezzanine lending activities and preferred equity investments. As of December 31, 2022, the Company had three mezzanine loans, including the City Park 2 and Solis Gainesville II preferred equity investments that are accounted for as notes receivable, each 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, 2022 and obtained industry loan loss data relative to these risk ratings. Each of the outstanding loans as of December 31, 2022 was "Pass" rated. The Company’s analysis resulted in an allowance for loan losses of approximately $1.6 million as of the year ended December 31, 2022. An allowance related to unfunded commitments of approximately $0.3 million as of December 31, 2022 was recorded as Other liabilities on the consolidated balance sheet.

At December 31, 2022, the Company reported $136.0 million of notes receivable, net of allowances of $1.3 million. At December 31, 2021, the Company reported $126.4 million of notes receivable, net of allowances of $1.0 million.


	Year ended December 31, 2022						Year ended December 31, 2021
	Funded		Unfunded		Total		Funded		Unfunded		Total
Beginning balance	$	994	$	10	$	1,004	$	2,584	$	—	$	2,584
Unrealized credit loss provision (release)	298		328		626		(802)		10		(792)
Extinguishment due to acquisition	—		—		—		(788)		—		(788)
Ending balance	$	1,292	$	338	$	1,630	$	994	$	10	$	1,004

During the year ended December 31, 2020, the Company placed the loans for Delray Beach Plaza and The Residences at Annapolis Junction on non-accrual 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. During the year ended December 31, 2022, the Company had the Constellation Energy Building note, which bears interest at 3% per annum, on non-accrual status. The principal balance of the note receivable is adequately secured by the seller's partnership interest. As of December 31, 2022, there were no other loans on non-accrual status.