NOTES RECEIVABLE AND PREFERRED EQUITY INVESTMENT

12 Months Ended

Dec. 31, 2012

Mortgage Loans on Real Estate [Abstract]

Notes Receivable and Preferred Equity Investment

Notes Receivable and Other Real Estate Related Investments

During 2012, the Company made total net investments in notes receivable aggregating $69.2 million.

The following table reconciles notes receivable investments from January 1, 2010 to December 31, 2012:

	For the years ended December 31,
(dollars in thousands)	2012			2011			2010
Beginning Balance	$	59,989		$	89,202		$	125,221
Additions during period:
New mortgage loans	108,629			34,758			—
Deductions during period:
Collections of principal	(25,388		)	(56,517		)	(42,010		)
Conversion to real estate through receipt of deed or through foreclosure	(14,000		)	—			—
Reclass to investments in unconsolidated affiliates	—			(8,000		)	—
Non-cash accretion of notes receivable	453			786			6,164
Reserves	(405		)	(240		)	(93		)
Other	—			—			(80		)
Ending Balance	$	129,278		$	59,989		$	89,202

As of December 31, 2012, the Company’s notes receivable, net, approximated $129.3 million and were collateralized by the underlying properties, the borrower’s ownership interest in the entities that own the properties and/or by the borrower’s personal guarantee. Notes receivable were as follows at December 31, 2012:

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. Notes Receivable and Other Real Estate Related Investments, continued

Note Description	Effective interest rate (1)	Maturity date	Periodic payment terms	Prior liens		Face amount of notes		Carrying amount of notes		Accrued Interest
(dollars in thousands)
First Mortgage	6.00%	12/31/2013	(2)	$	—	$	10,250	$	10,250	$	54
First Mortgage	8.00%	12/31/2013	(2)	—		8,000		8,000		—
First Mortgage	5.25%	Demand	(2)	—		23,555		18,500		803
First Mortgage	6.00%	6/1/2013	(2)	—		12,609		12,333		319
First Mortgage	11.00%	1/1/2014	(2)	—		25,000		25,000		—
Construction	20.51%	12/31/2012	(2)	—		5,400		5,400		168
Individually less than 3%	10.00% to 11.60%	12/31/13 to Capital Event	(2)	—		2,198		269		90
Sub-total first mortgages	8.60%					87,012		79,752		1,434
Zero Coupon	24.00%	1/3/2016	(2)	166,200		5,644		3,961		—
Mezzanine	10.00%	12/31/2013	(2)	85,835		9,089		9,089		176
Mezzanine	15.00%	Capital Event	(2)	13,265		3,834		3,834		1,135
Mezzanine	15.00%	11/9/2020	(2)	—		30,879		30,879		—
Individually less than 3%	12.00% to 17.50%	1/1/17 to Capital Event	(2)	37,623		9,198		1,763		—
Sub-total other	14.78%					58,644		49,526		1,311
Total						$	145,656	$	129,278	$	2,745

Notes:

(1) The effective interest rate includes points and exit fees.

(2) Interest only payable monthly, principal due on maturity.

The following table reconciles the allowance for notes receivable from December 31, 2010 to December 31, 2012:

	Allowance for
(dollars in thousands)	Notes Receivable
Balance at December 31, 2010	$	3,036
Change in allowance, net	240
Balance at December 31, 2011	$	3,276
Change in allowance, net	405
Balance at December 31, 2012	$	3,681