COPT Defense Properties Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Prepaid Expenses and Other Assets

Prepaid Expenses and Other Assets

9 Months Ended

Sep. 30, 2012

Prepaid Expense and Other Assets [Abstract]

Prepaid expenses and other assets consisted of the following (in thousands):



	September 30, 2012		December 31, 2011
Mortgage and other investing receivables	$	40,761	$	27,998
Prepaid expenses	24,396		20,035
Furniture, fixtures and equipment, net	8,657		10,177
Deferred tax asset	6,666		10,892
Lease incentives	5,595		5,233
Other assets	6,472		13,284
Prepaid expenses and other assets	$	92,547	$	87,619

Mortgage and Other Investing Receivables

Mortgage and other investing receivables consisted of the following (in thousands):



	September 30, 2012		December 31, 2011
Notes receivable from City of Huntsville	$	30,623	$	17,741
Mortgage loans receivable	10,138		10,257
	$	40,761	$	27,998

Our notes receivable from the City of Huntsville funded infrastructure costs in connection with our LW Redstone Company, LLC joint venture (see Note 5). Our mortgage loans receivable reflected above consists of two loans secured by properties in Greater Baltimore and the Baltimore/Washington Corridor. We did not have an allowance for credit losses in connection with these receivables at September 30, 2012 or December 31, 2011. The fair value of our mortgage and other investing receivables totaled $40.7 million at September 30, 2012 and $28.0 million at December 31, 2011.

Operating Notes Receivable

We had operating notes receivable due from tenants with terms exceeding one year totaling $373,000 at September 30, 2012 and $530,000 at December 31, 2011. We carried allowances for estimated losses for most of these balances.