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Note and Mortgages Payable | 9 Months Ended
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Sep. 30, 2014
Debt Disclosure [Abstract] |
Debt Disclosure [Text Block] |
7. | Note and Mortgages Payable
Prior to July 21, 2014, Agree Limited Partnership (the “Operating Partnership”) had in place an $85,000,000 unsecured revolving credit facility (“Credit Facility”), which was guaranteed by the Company. Subject to customary conditions, at the Company’s option, total commitments under the Credit Facility could have been increased up to an aggregate of $135,000,000. Borrowings under the Credit Facility were used for general corporate purposes, including working capital, development and acquisition activities, capital expenditures, repayment of indebtedness or other corporate activities. The Credit Facility was to mature on October 26, 2015, and could have been extended, at the Company’s election, for two one-year terms to October 2017, subject to certain conditions. Borrowings under the Credit Facility bore interest at LIBOR plus a spread of 150 to 215 basis points, or the base rate, depending on the Company’s leverage ratio. The Operating Partnership also had in place a $35,000,000 seven year unsecured term loan (“Unsecured Term Loan”), which is guaranteed by the Company. The Unsecured Term Loan includes an accordion feature providing the opportunity to borrow up to an additional $35,000,000 under the same loan agreement, subject to customary conditions. The Unsecured Term Loan matures on September 29, 2020. Borrowings under the Unsecured Term Loan bear interest at LIBOR plus a spread of 165 to 225 basis points depending on the Company’s leverage ratio. In conjunction with the closing of the loan, the Company entered into a seven year interest rate swap agreement resulting in a fixed interest rate of 3.85%, based on the current spread. On July 21, 2014, the Company entered into a $250,000,000 senior unsecured revolving credit and term loan agreement consisting of a new $150,000,000 revolving credit facility (“New Credit Facility”), a new $65,000,000 seven-year unsecured term loan facility (“New Term Loan”), and the existing $35,000,000 Unsecured Term Loan, the New Credit Facility, New Term Loan and Unsecured Term Loan, together, are referred to as “New Credit and Term Loan Facility.” The New Credit Facility is due July 21, 2018, with an additional one-year extension at the Company’s option, subject to customary conditions. Borrowings under the New Credit Facility will be priced at LIBOR plus 135 to 200 basis points, depending on the Company’s leverage, with an initial applicable margin of 135 basis points. The New Credit Facility replaces the Company’s existing $85,000,000 Credit Facility and may be increased to an aggregate of $250,000,000 at the Company’s election, subject to certain terms and conditions. As of September 30, 2014, $16,500,000 was outstanding under the New Credit Facility bearing a weighted average interest rate of 1.91%, and $133,500,000 was available for borrowing (subject to customary conditions to borrowing). The New Term Loan is due July 21, 2021. Borrowings under the New Term Loan will be priced at LIBOR plus 165 to 225 basis points, depending on the Company’s leverage, with an initial applicable margin of 165 basis points. The Company has entered into interest rate swaps to fix LIBOR at 2.09% until maturity, implying an all-in interest rate of 3.74% at closing. Proceeds from the New Term Loan were used to repay borrowings under the Company’s prior Credit Facility. The New Term Loan may be increased to an aggregate of $75,000,000 at the Company’s election, subject to certain terms and conditions. As of September 30, 2014, $65,000,000 was outstanding under the New Term Loan. Additionally, conforming changes were made to certain terms and conditions of the Company’s existing Unsecured Term Loan as part of the agreement. The maturity date and pricing remains unchanged. The New Credit and Term Loan Facility contains customary covenants, including, among others, financial covenants regarding debt levels, total liabilities, tangible net worth, fixed charge coverage, unencumbered borrowing base properties, and permitted investments. The Company was in compliance with the covenant terms at September 30, 2014. Mortgages payable consisted of the following:
|  | September 30, 2014 |  | December 31, 2013 |
Note payable in monthly installments of interest only at LIBOR plus 160 basis points, swapped to a fixed rate of 2.49% with balloon payment due April 2018; collateralized by related real estate and tenants' leases |  | $ | 25,000,000 |  | $ | 25,000,000 |
Note payable in monthly installments of interest only at 3.60% per annum, with balloon payment due January 2023; collateralized by related real estate and tenants' leases |  |  | 23,640,000 |  |  | 23,640,000 |
Note payable in monthly principal installments of $53,160 plus interest at 170 basis points over LIBOR, swapped to a fixed rate of 3.62% as of September 30, 2014. A final balloon payment in the amount of $19,744,758 is due May 2017 unless extended for a two year period at the option of the Company, subject to certain conditions, collateralized by related real estate and tenants’ leases |  |  | 21,557,558 |  |  | 22,017,758 |
Note payable in monthly installments of $153,838 including interest at 6.90% per annum, with the final monthly payment due January 2020; collateralized by related real estate and tenants’ leases |  |  | 8,217,678 |  |  | 9,149,944 |
Note payable in monthly installments of $91,675 including interest at 6.27% per annum, with a final monthly payment due July 2026; collateralized by related real estate and tenants’ leases |  |  | 9,174,387 |  |  | 9,557,942 |
Note payable in monthly installments of $60,097 including interest at 5.08% per annum, with a final balloon payment in the amount of $9,167,573 paid June 2014; collateralized by related real estate and tenants’ leases |  |  | - |  |  | 9,271,561 |
Note payable in monthly installments of $99,598 including interest at 6.63% per annum, with the final monthly payment due February 2017; collateralized by related real estate and tenants’ leases |  |  | 2,662,057 |  |  | 3,405,384 |
Note payable in monthy interest-only installments of $48,467 at 6.56% annum, with a balloon payment in the amount of $8,580,000 due June 2016; collateralized by related real estate and tenants’ leases |  |  | 8,580,000 |  |  | 8,580,000 |
Note payable in monthly installments of $23,004 including interest at 6.24% per annum, with the final balloon payment of $2,766,628 due February 2020; collateralized by related real estate and tenant lease |  |  | 3,222,570 |  |  | 3,275,170 |
Note payable in monthly installments of $35,673 including interest at 5.01% per annum, with the final balloon payment of $4,034,627 due September 2023; collateralized by related real estate and tenant lease |  |  | 5,631,183 |  |  | - |
Total |  | $ | 107,685,433 |  | $ | 113,897,759 |
The above mortgages payable are collateralized by related real estate with an aggregate net book value of $147,577,000. The weighted average interest rate for the mortgage notes payable at September 30, 2014 was 4.30%. In September 2014, the Company assumed a loan in the amount of $5,631,000 in conjunction with the acquisition of a property. The loan matures September 2023 and carries a 5.01% interest rate. The following table presents scheduled principal payments on mortgages and notes payable as of September 30, 2014:
Year Ending September 30,
2015 |  | $ | 3,777,636 |
2016 |  |  | 12,608,602 |
2017 (1) |  |  | 23,084,968 |
2018 (2) |  |  | 44,033,211 |
2019 |  |  | 2,705,479 |
Thereafter |  |  | 137,975,537 |
Total debt |  | $ | 224,185,433 |
| (1) | Scheduled maturities in 2017 include $19,744,758 which represents the ending balance of a note payable due in 2017. The note matures May 14, 2017 and may be extended, at the Company’s election, for a two-year term to May 2019, subject to certain conditions.
| (2) | Scheduled maturities in 2018 include the $16,500,000 outstanding balance under the New Credit Facility as of September 30, 2014. The New Credit Facility matures on July 21, 2018, and may be extended, at the Company’s election, for a one-year term to July 2019, subject to certain conditions.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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