Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:



	December 31,
	2013			2012
Seller financing (first mortgages)	$	16,454		$	15,853
Less allowance	—			—
	16,454			15,853
Mortgage receivable	9,435			8,648
Less allowance	—			—
	9,435			8,648
Promissory notes	822			1,153
Less allowance	(302		)	(182		)
	520			971
Mortgages and notes receivable, net	$	26,409		$	25,472

During 2010, we provided seller financing in conjunction with two disposition transactions. The seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets.

During 2012, we provided an $8.6 million loan to a third party, which was used by such third party to fund a portion of the purchase price to acquire 77 acres of mixed-use development land adjacent to our 68-acre office development parcel in Nashville, TN. Initially, the loan is scheduled to mature in December 2015 and bears interest at 5.0% per year. The loan can be extended by the third party for up to three additional years, subject to applicable increases in the interest rate. We also agreed to loan such third party $8.4 million on a secured basis to fund future infrastructure development securitized by the 77 acres. As of December 31, 2013, $0.3 million has been funded to the third party for infrastructure development. We concluded this arrangement to be an interest in a variable interest entity. However, since we do not have the power to direct matters that most significantly impact the activities of the entity, we do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated. Our risk of loss with respect to this arrangement is limited to the carrying value of the mortgage receivable and the future infrastructure development funding commitment.

We evaluate the ability to collect our mortgages and notes receivable by monitoring the leasing statistics and/or market fundamentals of these assets. As of December 31, 2013, our mortgages and notes receivable were not in default and there were no other indicators of impairment.

The following table sets forth our notes receivable allowance, which relates only to promissory notes:



	December 31,
	2013		2012
Beginning notes receivable allowance	$	182	$	61
Bad debt expense	—		186
Recoveries/write-offs/other	120		(65		)
Total notes receivable allowance	$	302	$	182