7.Mortgages Payable

During the first nine months of 2016, we made $183.7 million in principal payments, including the repayment of eight mortgages in full for $161.5 million, and we assumed mortgages totaling $32.5 million, excluding net premiums. During the third quarter of 2016, we refinanced one of these assumed mortgages and received an additional $10.0 million in proceeds. The assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions for items such as solvency, bankruptcy, misrepresentation, fraud, misapplication of payments, environmental liabilities, failure to pay taxes, insurance premiums, liens on the property, violations of the single purpose entity requirements, and uninsured losses. We expect to pay off our mortgages as soon as prepayment penalties make it economically feasible to do so.

During the first nine months of 2016, aggregate net premiums totaling $692,000 were recorded upon the assumption of a mortgage with an above-market interest rate. 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 September 30, 2016, we remain in compliance with these covenants.

During the first nine months of 2015, we made $140.8 million in principal payments, including the repayment of ten mortgages in full for $135.3 million. No mortgages were assumed during the first nine months of 2015.

We did not incur any deferred financing costs on our mortgages assumed in 2016. The balance of our deferred financing costs, which are classified as part of mortgages payable, net, on our consolidated balance sheets, was $374,000 at September 30, 2016 and $553,000 at December 31, 2015. These costs are being amortized over the remaining term of each mortgage.

The following is a summary of all our mortgages payable as of September 30, 2016 and December 31, 2015, respectively (dollars in thousands):

Weighted

Unamortized

Average

Premium

Stated

Effective

Remaining

and Deferred

Mortgage

Number of

Interest

Years Until

Principal

Finance Costs

Payable

As Of

Properties(1)

Rate(2)

Rate(3)

Maturity

Balance

Balance, net

Balance

9/30/16

129

4.9%

4.3%

3.9

496,470

6,731

503,201

12/31/15

183

4.9%

4.1%

3.6

637,658

8,529

646,187

(1)

At September 30, 2016, there were 38 mortgages on 129 properties, while at December 31, 2015, there were 44 mortgages on 183 properties. The mortgages require monthly payments, with principal payments due at maturity. The mortgages are at fixed interest rates, except for five mortgages on 14 properties totaling $68.1 million at September 30, 2016, including net unamortized discounts. At December 31, 2015, four mortgages on 13 properties totaling $51.1 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 three mortgages totaling $32.4 million at September 30, 2016, and two mortgages totaling $15.5 million at December 31, 2015.

(2)

Stated interest rates ranged from 2.3% to 6.9% at September 30, 2016, while stated interest rates ranged from 2.0% to 6.9% at December 31, 2015.

(3)

Effective interest rates ranged from 2.5% to 8.8% at September 30, 2016, while effective interest rates ranged from 2.2% to 8.9% at December 31, 2015.

The following table summarizes the maturity of mortgages payable, excluding net premiums of $7.1 million and deferred finance costs of $374,000, as of September 30, 2016 (dollars in millions):

Year of Maturity	Principal
2016	$	36.3
2017	109.4
2018	15.9
2019	42.3
2020	82.4
Thereafter	210.2

Totals	$	496.5