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Mortgage Notes Payable
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Mortgage Notes Payable
Mortgage Notes Payable:
Mortgage notes payable at December 31, 2017 and 2016 consist of the following:
 
 
Carrying Amount of Mortgage Notes(1)
 
 
 
 
 
 
 
 
2017
 
2016
 
Effective Interest
Rate(2)
 
Monthly
Debt
Service(3)
 
Maturity
Date(4)
Property Pledged as Collateral
 
Related Party
 
Other
 
Related Party
 
Other
 
Chandler Fashion Center(5)
 

 
199,904

 

 
199,833

 
3.77
%
 
625

 
2019
Danbury Fair Mall
 
104,599

 
104,598

 
107,929

 
107,928

 
5.53
%
 
1,538

 
2020
Fashion Outlets of Chicago(6)
 

 
199,298

 

 
198,966

 
3.02
%
 
477

 
2020
Fashion Outlets of Niagara Falls USA
 

 
112,770

 

 
115,762

 
4.89
%
 
727

 
2020
Freehold Raceway Mall(5)(7)
 

 
398,050

 

 
220,643

 
3.94
%
 
1,300

 
2029
Fresno Fashion Fair
 

 
323,261

 

 
323,062

 
3.67
%
 
971

 
2026
Green Acres Commons(8)
 

 
107,219

 

 

 
4.07
%
 
322

 
2021
Green Acres Mall
 

 
291,366

 

 
297,798

 
3.61
%
 
1,447

 
2021
Kings Plaza Shopping Center
 

 
447,231

 

 
456,958

 
3.67
%
 
2,229

 
2019
Northgate Mall(9)
 

 

 

 
63,434

 


 


 

Oaks, The
 

 
196,732

 

 
201,235

 
4.14
%
 
1,064

 
2022
Pacific View
 

 
124,397

 

 
127,311

 
4.08
%
 
668

 
2022
Queens Center
 

 
600,000

 

 
600,000

 
3.49
%
 
1,744

 
2025
Santa Monica Place(10)
 

 
296,366

 

 
219,564

 
3.13
%
 
706

 
2022
SanTan Village Regional Center
 

 
124,703

 

 
127,724

 
3.14
%
 
589

 
2019
Stonewood Center(11)
 

 

 

 
99,520

 


 


 

Towne Mall
 

 
21,161

 

 
21,570

 
4.48
%
 
117

 
2022
Tucson La Encantada
 
66,970

 

 
68,513

 

 
4.23
%
 
368

 
2022
Victor Valley, Mall of
 

 
114,617

 

 
114,559

 
4.00
%
 
380

 
2024
Vintage Faire Mall
 

 
263,818

 

 
269,228

 
3.55
%
 
1,256

 
2026
Westside Pavilion
 

 
141,020

 

 
143,881

 
4.49
%
 
783

 
2022
 
 
$
171,569

 
$
4,066,511

 
$
176,442

 
$
3,908,976

 
 

 
 

 
 


(1)
The mortgage notes payable balances include the unamortized debt premiums. Debt premiums represent the excess of the fair value of debt over the principal value of debt assumed in various acquisitions and are amortized into interest expense over the remaining term of the related debt in a manner that approximates the effective interest method.        
The debt premiums as of December 31, 2017 and 2016 consist of the following:
Property Pledged as Collateral
 
2017
 
2016
Fashion Outlets of Niagara Falls USA
 
$
2,630

 
$
3,558

Stonewood Center
 

 
2,349

 
 
$
2,630

 
$
5,907


The mortgage notes payable balances also include unamortized deferred finance costs that are amortized into interest expense over the remaining term of the related debt in a manner that approximates the effective interest method. Unamortized deferred finance costs were $17,838 and $12,716 at December 31, 2017 and 2016, respectively.
(2)
The interest rate disclosed represents the effective interest rate, including the debt premiums and deferred finance costs.
(3)
The monthly debt service represents the payment of principal and interest.
(4)
The maturity date assumes that all extension options are fully exercised and that the Company does not opt to refinance the debt prior to these dates. These extension options are at the Company's discretion, subject to certain conditions, which the Company believes will be met.
(5)
A 49.9% interest in the loan has been assumed by a third party in connection with a co-venture arrangement (See Note 11Co-Venture Arrangement).
(6)
The loan bears interest at LIBOR plus 1.50% and matures on March 31, 2020. At December 31, 2017 and 2016, the total interest rate was 3.02% and 2.43%, respectively.
(7)
On October 19, 2017, the joint venture replaced the existing loan on the property with a new $400,000 loan that bears interest at an effective rate of 3.94% and matures on November 1, 2029.
(8)
On September 29, 2017, the Company placed a new $110,000 loan on the property that bears interest at LIBOR plus 2.15% and matures on March 29, 2021. The loan can be expanded, depending on certain conditions, up to $130,000. At December 31, 2017, the total interest rate was 4.07%.
(9)
On January 18, 2017, the loan was paid off in connection with sale of the underlying property (See Note 15Dispositions).
(10)
On December 4, 2017, the Company replaced the existing loan on the property with a new $300,000 loan that bears interest at LIBOR plus 1.35% and matures on December 9, 2019 with three one-year extension options. The loan is covered by an interest rate cap agreement that effectively prevents LIBOR from exceeding 4.00% (See Note 5Derivative Instruments and Hedging Activities). At December 31, 2017 the total interest rate was 3.13%.
(11)
On November 1, 2017, the Company paid off the loan on the property.
Most of the mortgage loan agreements contain a prepayment penalty provision for the early extinguishment of the debt.
As of December 31, 2017, all of the Company's mortgage notes payable are secured by the properties on which they are placed and are non-recourse to the Company.
Total interest expense capitalized during the years ended December 31, 2017, 2016 and 2015 was $13,160, $10,316 and $13,052, respectively.
Related party mortgage notes payable are amounts due to affiliates of NML. See Note 18Related Party Transactions for interest expense associated with loans from NML.
The estimated fair value (Level 2 measurement) of mortgage notes payable at December 31, 2017 and 2016 was $4,250,816 and $4,126,819, respectively, based on current interest rates for comparable loans. Fair value was determined using a present value model and an interest rate that included a credit value adjustment based on the estimated value of the property that serves as collateral for the underlying debt.
The future maturities of mortgage notes payable are as follows:
Year Ending December 31,
 
2018
$
49,800

2019
796,591

2020
528,456

2021
401,733

2022
802,552

Thereafter
1,674,156

 
4,253,288

Debt premium
2,630

Deferred finance cost, net
(17,838
)
 
$
4,238,080


The future maturities reflected above reflect the extension options that the Company believes will be exercised.