NOTES RECEIVABLE

9 Months Ended

Sep. 30, 2011

NOTES RECEIVABLE ABSTRACT

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTES RECEIVABLE

At September 30, 2011, the Company’s notes receivable, net, aggregated $41.3 million, and were collateralized either by the underlying properties or the borrowers' ownership interest in the entities that own the properties and/or by the borrowers' personal guarantee as follows:

Description	Effective Interest Rate	Maturity Date	First Priority Liens		Net Carrying amount of Notes Receivable		Extension Options
(dollars in thousands)
Mezzanine Loan	10.0%	Demand	$	—	$	2,280	—
Mezzanine Loan	13.0%	Demand	29,295		2,980		—
Mezzanine Loan	13.0%	Demand	6,000		1,964		—
First Mortgage Loan	10.8%	Demand	—		10,000		—
Other Loan	14.5%	12/2011	—		8,585		—
Other Loan	7.0%	2/2012	—		4,000		—
Other Loan	24.0%	1/2016	166,200		3,478		—
Mezzanine Loan	17.5%	1/2017	37,700		2,173		—
Mezzanine Loan	15.0%	Upon Capital Event	11,925		3,834		—
Individually less than 3%	10% to 13.0%	Demand to 12/2011	16,853		2,010		—
Total					$	41,304

During September 2011, the Company reclassified an $8.0 million mezzanine loan from Notes Receivable to Investments in and Advances to Unconsolidated Affiliates related to the acquisition of the Georgetown Portfolio (Note 5).

During September 2011, the Company made a $4.0 million loan to two members of an entity which owns a shopping center in Washington D.C. The note accrues interest at 7% and matures in February 2012. In addition to the loan, the Company entered into and subsequently exercised an option to purchase the shopping center at a future date, pending the servicer's approval of the assignment of a first mortgage loan of $17.0 million. The loan will be offset against the ultimate purchase price when the Company acquires the property.

During May 2011, the Company received a payment of $54.7 million on a mezzanine loan, representing $33.8 million of principal, $13.4 million of accrued interest, and a $7.5 million exit fee.

During February 2011, the Company made a mezzanine loan for $3.8 million which accrues interest at 15% and is payable upon a capital event. The Company also received a payment of $1.9 million on a mezzanine loan.

Allowances for real estate notes receivable are established based upon management's quarterly review of the investments. In performing this review, management considers the estimated net recoverable value of the loan as well as other factors, including the fair value of any collateral, the amount and status of any senior debt, and the prospects for the borrower. Because this determination is based upon projections of future economic events, which are inherently subjective, the amounts ultimately realized from the loans may differ materially from the carrying value at the balance sheet date.

The activity in the allowance for notes receivable for the nine months ended September 30, 2011 is as follows:

(dollars in thousands)	Allowance for Notes Receivable
Balance at December 31, 2010	$	4,964
Provision for losses on notes receivable	210
Balance at September 30, 2011	$	5,174