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Mortgage Notes Payable, Net, Mezzanine Notes Payable and Outside Members’ Notes Payable | 12 Months Ended
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Dec. 31, 2017
Loans Payable [Abstract] |
6. Mortgage Notes Payable, Net, Mezzanine Notes Payable and Outside Members’ Notes Payable | 6. Mortgage Notes Payable, Net, Mezzanine Notes Payable and Outside Members’ Notes Payable The Company had outstanding mortgage notes payable totaling approximately $3.0 billion and $2.1 billion as of December 31, 2017 and 2016, respectively, each collateralized by one or more buildings and related land included in real estate assets. The mortgage notes payable are generally due in monthly installments and mature at various dates through June 9, 2027. Fixed rate mortgage notes payable totaled approximately $3.0 billion and $2.1 billion at December 31, 2017 and 2016, respectively, with contractual interest rates ranging from 3.43% to 7.69% per annum at December 31, 2017 and 4.75% to 7.69% per annum at December 31, 2016 (with a weighted-average interest rate of 3.78% and 5.59% per annum (excluding the mezzanine notes payable) at December 31, 2017 and 2016, respectively). There were no variable rate mortgage loans at December 31, 2017 and 2016. On June 7, 2017, the Company’s consolidated entity in which it has a 60% ownership interest and that owns 767 Fifth Avenue (the General Motors Building) located in New York City completed the refinancing of the indebtedness that had been secured by direct and indirect interests in the property. The new mortgage financing has a principal amount of $2.3 billion, bears interest at a fixed interest rate of 3.43% per annum and matures on June 9, 2027. The loan requires monthly interest-only payments during the 10-year term of the loan, with the entire principal amount being due at maturity. The refinanced indebtedness consisted of (1) mortgage loans payable collateralized by the property aggregating $1.3 billion, (2) mezzanine loans payable aggregating $306.0 million, (3) additional mezzanine loans payable aggregating $294.0 million and (4) member loans aggregating $450.0 million with outstanding accrued interest payable totaling approximately $425.0 million. The mortgage loans required monthly interest-only payments at a weighted-average fixed interest rate of 5.95% per annum and were scheduled to mature on October 7, 2017. The mezzanine loans required interest-only payments at a weighted-average fixed interest rate of 6.02% per annum and were scheduled to mature on October 7, 2017. In addition, a subsidiary of the consolidated entity had acquired a lender’s interest in certain other mezzanine loans assumed during the acquisition of the property having an aggregate principal amount of $294.0 million and a stated interest rate of 6.02% per annum for a purchase price of approximately $263.1 million in cash. These mezzanine loans payable had been eliminated in consolidation and were canceled upon the refinancing of the indebtedness. The member loans bore interest at a fixed rate of 11.0% per annum and were scheduled to mature on June 9, 2017. A portion of the original purchase price of the property was financed with loans from the members on a pro rata basis equal to their percentage interest in the consolidated entity. The Company had eliminated in consolidation its member loan totaling $270.0 million and its share of the related accrued interest payable of approximately $255.0 million at the date of the refinancing. The remaining outside members’ notes payable and related accrued interest payable totaling $180.0 million and approximately $170.0 million, respectively, at the date of the refinancing had been reflected as Outside Members’ Notes Payable and within Accrued Interest Payable, respectively, on the Company’s Consolidated Balance Sheets. The net proceeds from the new financing were used to repay all of the outstanding accrued interest payable on the member loans and a portion of the outstanding principal balance of the member loans totaling approximately $176.1 million. In connection with the refinancing, the members of the Company’s consolidated entity contributed the remaining balance of the member notes payable totaling approximately $273.9 million (of which the Company’s share of approximately $164.4 million had been eliminated in consolidation) to equity in the consolidated entity (See Note 11). There was no prepayment penalty associated with the repayments. The Company recognized a gain from early extinguishment of debt totaling approximately $14.6 million primarily consisting of the acceleration of the remaining balance related to historical fair value debt adjustments. No mortgage loans at December 31, 2017 and one mortgage loan totaling approximately $1.3 billion at December 31, 2016 had been accounted for at its fair value on the date the mortgage loan was assumed in connection with the consolidation of real estate. The impact of recording mortgage loans at fair value resulted in a decrease to interest expense of approximately $19.6 million, $46.4 million and $55.0 million for the years ended December 31, 2017, 2016 and 2015, respectively. The cumulative liability related to the fair value adjustment was $33.8 million at December 31, 2016 and is included in mortgage notes payable, net in the Consolidated Balance Sheets. Contractual aggregate principal payments of mortgage notes payable at December 31, 2017 are as follows:
| Principal Payments
| (in thousands)
2018 | $ | 18,633 |
2019 | 19,670 |
2020 | 20,766 |
2021 | 40,182 |
2022 | 614,710 |
Thereafter | 2,300,000 |
Total aggregate principal payments | 3,013,961 |
Deferred financing costs, net | (34,680 | )
Total carrying value of mortgage notes payable, net | $ | 2,979,281 |

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