In conjunction with the Spin-Off and IPO, notes payable to certain former stockholders of MMREIS that were issued in settlement of restricted stock and SARs awards which were redeemed by MMREIS upon the termination of employment by these former shareholders (“the Notes”), and had been previously assumed by MMC were transferred to the Company.

The unsecured notes payable for repurchase of restricted stock bears interest at 5% with annual principal and interest installments payable until April 14, 2020, when the remaining principal balance will be due in full. The unsecured notes payable for repurchase of outstanding SARs also bear interest at 5%, with annual principal and interest installments payable until April 14, 2020, when the remaining principal balance will be due in full.

Subsequent to the IPO, interest payable and interest expense associated with the Notes is recorded in accounts payable and accrued expenses and selling, general and administrative expenses, respectively. As of December 31, 2013, accrued interest expense pertaining to the Notes was $0.4 million and was recorded in accounts payable and accrued expenses in the accompanying consolidated balance sheets. Of this amount, $0.1 million was recorded in selling, general and administrative expenses and the remaining $0.3 million pertaining to accrued interest expense prior to the IPO date of October 31, 2013 was recorded in additional paid-in capital in the accompanying statements of stockholders’ equity.

As of December 31, 2013, the future minimum principal payments for the Notes for restricted stock and SARs were as follows (in thousands):