Mortgages Payable

6 Months Ended

Jun. 30, 2015

6.Mortgages Payable

During the first six months of 2015, we made $79.3 million in principal payments, including the repayment of five mortgages in full for $75.6 million. No mortgages were assumed during the first six months of 2015.

During the first six months of 2014, we made $21.9 million in principal payments, including the repayment of two mortgages in full for $18.2 million, and assumed mortgages totaling $159.7 million, excluding net premiums. The mortgages are secured by the properties on which the debt was placed. We expect to pay off the mortgages as soon as prepayment penalties make it economically feasible to do so.

During the first six months of 2014, aggregate net premiums totaling $718,000 were recorded upon assumption of the mortgages for above-market interest rates. Amortization of our net premiums is recorded as a reduction to interest expense over the remaining term of the respective mortgages, using a method that approximates the effective-interest method.

These mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender. At June 30, 2015, we remain in compliance with these covenants.

We did not incur any deferred financing costs on our mortgages assumed in 2014. The balance of our deferred financing costs, which are classified as part of other assets, net, on our consolidated balance sheets, was $684,000 at June 30, 2015 and $827,000 at December 31, 2014. These costs are being amortized over the remaining term of each mortgage.

The following is a summary of all our mortgages payable as of June 30, 2015 and December 31, 2014, respectively (dollars in thousands):

		Weighted	Weighted	Weighted
		Average	Average	Average
		Stated	Effective	Remaining	Remaining		Unamortized		Mortgage
	Number of	Interest	Interest	Years Until	Principal		Premium		Payable
As Of	Properties(1)	Rate(2)	Rate(3)	Maturity	Balance		Balance, net		Balance
6/30/15	220	5.0%	4.0%	3.5	$	756,720	$	12,741	$	769,461
12/31/14	241	5.0%	4.0%	3.7	$	836,011	$	16,564	$	852,575

(1) At June 30, 2015, there were 52 mortgages on the 220 properties, while at December 31, 2014, there were 57 mortgages on the 241 properties. The mortgages require monthly payments, with principal payments due at maturity. The mortgages are at fixed interest rates, except for four mortgages on 13 properties totaling $51.0 million at June 30, 2015, including net unamortized discounts. At December 31, 2014, five mortgages on 14 properties totaling $74.5 million, including net unamortized discounts, were at variable interest rates. After factoring in arrangements which limit our exposure to interest rate risk and effectively fix our per annum interest rates, our variable rate mortgage debt includes two mortgages totaling $15.5 million at June 30,2015 and three mortgages totaling $39.1 million at December 31,2014.

(2) Stated interest rates ranged from 2.0% to 6.9% at June 30, 2015 and December 31, 2014.

(3) Effective interest rates ranged from 2.2% to 9.0% at June 30, 2015 and December 31, 2014.

The following table summarizes the maturity of mortgages payable, excluding net premiums of $12.7 million, as of June 30, 2015 (dollars in millions):

Year of
Maturity
2015	$	40.4
2016	248.4
2017	142.5
2018	15.1
2019	26.0
Thereafter	284.3

Totals	$	756.7