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Debt | 9 Months Ended
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Sep. 30, 2018
Debt Disclosure [Abstract] |
Debt Disclosure [Text Block] | Note 4 – Debt As of September 30, 2018, the Company had total indebtedness of $619.9 million, including (i) $62.2 million of mortgage notes payable; (ii) $158.7 million of unsecured term loans; (iii) $385.0 million of senior unsecured notes; and (iv) $14.0 million of borrowings under our Credit Facility. Mortgage Notes Payable As of September 30, 2018, the Company had total gross mortgage indebtedness of $62.2 million which was collateralized by related real estate and tenants’ leases with an aggregate net book value of $107.9 million. Including mortgages that have been swapped to a fixed interest rate, the weighted average interest rate on the Company’s mortgage notes payable was 4.16% as of September 30, 2018 and 3.74% as of December 31, 2017. In December 2017, the Company assumed an interest-only mortgage note for $21.5 million with PNC Bank, National Association in connection with an acquisition. The mortgage note is due October 2019, secured by a multi-tenant property and has a fixed interest rate of 3.32%.
|  | September 30, 2018 |  |  | December 31, 2017 |
(not presented in thousands) |  | (in thousands) |
Note payable in monthly installments of interest only at LIBOR plus 160 basis points, swapped to a fixed rate of 2.49%. A balloon payment in the amount of $25,000,000 was repaid on March 29, 2018 |  | $ | - |  |  | $ | 25,000 |
Note payable in monthly installments of interest only at 3.32% per annum, with a balloon payment due October 2019 |  |  | 21,500 |  |  |  | 21,500 |
Note payable in monthly installments of $153,838, including interest at 6.90% per annum, with the final monthly payment due January 2020 |  |  | 2,345 |  |  |  | 3,573 |
Note payable in monthly installments of $23,004, including interest at 6.24% per annum, with a balloon payment of $2,781,819 due February 2020 |  |  | 2,896 |  |  |  | 2,963 |
Note payable in monthly installments of interest only at 3.60% per annum, with a balloon payment due January 1, 2023 |  |  | 23,640 |  |  |  | 23,640 |
Note payable in monthly installments of $35,673, including interest at 5.01% per annum, with a balloon payment of $4,034,627 due September 2023 |  |  | 5,003 |  |  |  | 5,131 |
Note payable in monthly installments of $91,675 including interest at 6.27% per annum, with a final monthly payment due July 2026 |  |  | 6,795 |  |  |  | 7,288 |
Total principal |  |  | 62,179 |  |  |  | 89,095 |
Unamortized debt issuance costs |  |  | (642 | ) |  |  | (825 | )
Total |  | $ | 61,537 |  |  | $ | 88,270 |
The mortgage loans encumbering our properties are generally non-recourse, subject to certain exceptions for which we would be liable for any resulting losses incurred by the lender. These exceptions vary from loan to loan, but generally include fraud or material misrepresentations, misstatements or omissions by the borrower, intentional or grossly negligent conduct by the borrower that harms the property or results in a loss to the lender, filing of a bankruptcy petition by the borrower, either directly or indirectly, and certain environmental liabilities. At September 30, 2018, there were no mortgage loans with partial recourse to us. We have entered into mortgage loans which are secured by multiple properties and contain cross-default and cross-collateralization provisions. Cross-collateralization provisions allow a lender to foreclose on multiple properties in the event that we default under the loan. Cross-default provisions allow a lender to foreclose on the related property in the event a default is declared under another loan. The Company was in compliance with covenant terms for all mortgages payable at September 30, 2018. Senior Unsecured Notes The following table presents the Senior Unsecured Notes balance net of unamortized debt issuance costs as of September 30, 2018, and December 31, 2017 (in thousands):
|  | September 30, 2018 |  |  | December 31, 2017 |
2025 Senior Unsecured Notes |  | $ | 50,000 |  |  | $ | 50,000 |
2027 Senior Unsecured Notes |  |  | 50,000 |  |  |  | 50,000 |
2028 Senior Unsecured Notes |  |  | 60,000 |  |  |  | 60,000 |
2029 Senior Unsecured Notes |  |  | 100,000 |  |  |  | 100,000 |
2030 Senior Unsecured Notes |  |  | 125,000 |  |  |  | - |
Total Principal |  |  | 385,000 |  |  |  | 260,000 |
Unamortized debt issuance costs |  |  | (927 | ) |  |  | (878 | )
Total |  | $ | 384,073 |  |  | $ | 259,122 |
In May 2015, the Company and the Operating Partnership completed a private placement of $100.0 million principal amount of senior unsecured notes. The senior unsecured notes were sold in two series; $50.0 million of 4.16% notes due May 2025 (the “2025 Senior Unsecured Notes”) and $50.0 million of 4.26% notes due May 2027(the “2027 Senior Unsecured Notes”). The weighted average term of the senior unsecured notes is 11 years and the weighted average interest rate is 4.21%. The senior unsecured notes were sold only to institutional investors and did not involve a public offering in reliance on the exemption from registration in Section 4(a)(2) of the Securities Act. In July 2016, the Company entered into a note purchase agreement with institutional purchasers. Pursuant to the note purchase agreement, the Operating Partnership completed a private placement of $60.0 million aggregate principal amount of our 4.42% senior unsecured notes due July 2028 (the “2028 Senior Unsecured Notes”). The senior unsecured notes were sold only to institutional investors and did not involve a public offering in reliance on the exemption from registration in Section 4(a)(2) of the Securities Act. In August 2017, the Company entered into a note purchase agreement with institutional purchasers. Pursuant to the note purchase agreement, the Operating Partnership completed a private placement of $100.0 million aggregate principal amount of our 4.19% senior unsecured notes due September 2029 (the “2029 Senior Unsecured Notes”). The closing of the private placement was consummated in September 2017; and, on that date, the Operating Partnership issued the senior unsecured notes. The senior unsecured notes were sold only to institutional investors and did not involve a public offering in reliance on the exemption from registration in Section 4(a)(2) of the Securities Act. In September 2018, the Company entered into two supplements to uncommitted master note facilities previously entered into with institutional purchasers in August 2017. Pursuant to the supplements, the Operating Partnership completed a private placement of $125.0 million aggregate principal amount of our 4.32% senior unsecured notes due September 2030 (the “2030 Senior Unsecured Notes”). The senior unsecured notes were sold only to institutional investors and did not involve a public offering in reliance on the exemption from registration in Section 4(a)(2) of the Securities Act. Unsecured Term Loan Facilities The following table presents the Unsecured Term Loans balance net of unamortized debt issuance costs as of September 30, 2018 and December 31, 2017 (in thousands):
|  | September 30, 2018 |  |  | December 31, 2017 |
2019 Term Loan |  | $ | 18,734 |  |  | $ | 19,304 |
2023 Term Loan |  |  | 40,000 |  |  |  | 40,000 |
2024 Term Loans |  |  | 100,000 |  |  |  | 100,000 |
Total Principal |  |  | 158,734 |  |  |  | 159,304 |
Unamortized debt issuance costs |  |  | (974 | ) |  |  | (1,133 | )
Total |  | $ | 157,760 |  |  | $ | 158,171 |
The amended and restated credit agreement, described below, extended the maturity dates of the $65.0 million unsecured term loan facility and $35.0 million unsecured term loan facility (together, the “2024 Term Loan Facilities”) to January 2024. In connection with entering into the amended and restated credit agreement, the prior notes evidencing the existing $65.0 million unsecured term loan facility and $35.0 million unsecured term loan facility were canceled and new notes evidencing the 2024 Term Loan Facilities were executed. Borrowings under the unsecured 2024 Term Loan Facilities bear interest at a variable LIBOR plus 150 to 245 basis points, depending on the Company's credit rating. The Company utilized existing interest rate swaps to effectively fix the LIBOR at 213 basis points until maturity. As of September 30, 2018, $100.0 million was outstanding under the 2024 Term Loan Facilities bearing an all-in interest rate of 3.78%. In July 2016, the Company completed a $40.0 million unsecured term loan facility that matures July 2023 (the “2023 Term Loan”). Borrowings under the 2023 Term Loan are priced at LIBOR plus 150 to 245 basis points, depending on the Company’s credit rating. The Company entered into an interest rate swap to fix LIBOR at 140 basis points until maturity. As of September 30, 2018, $40.0 million was outstanding under the 2023 Term Loan, which was subject to an all-in interest rate of 3.05%. In August 2016, the Company entered into a $20.3 million unsecured amortizing term loan that matures May 2019 (the “2019 Term Loan”). Borrowings under the 2019 Term Loan are priced at LIBOR plus 170 basis points. In order to fix LIBOR on the 2019 Term Loan at 1.92% until maturity, the Company had an interest rate swap agreement in place, which was assigned by the lender under the Mortgage Note to the 2019 Term Loan lender. As of September 30, 2018, $18.7 million was outstanding under the 2019 Term Loan bearing an all-in interest rate of 3.62%. Senior Unsecured Revolving Credit Facility In December 2016, the Company amended and restated the credit agreement (the “Credit Agreement”) that governs the Company's senior unsecured revolving credit facility and the Company's unsecured term loan facility to increase the aggregate borrowing capacity to $350.0 million. In July 2018, the Company elected to pursue commitments under the accordion option outlined in its senior unsecured revolving credit facility to increase the revolving commitments by $75.0 million, raising the total revolving commitments under the amended and restated credit agreement from $250.0 million to $325.0 million. Including the increased commitments, the amended and restated credit agreement provides for a $325.0 million unsecured revolving credit facility, a $65.0 million unsecured term loan facility and a $35.0 million unsecured term loan facility (referenced above as 2024 Term Loan Facilities). The unsecured revolving credit facility matures January 2021 with options to extend the maturity date to January 2022. The 2024 Term Loan Facilities mature January 2024. The Company has the ability to increase the aggregate borrowing capacity under the credit agreement to a maximum amount of $500.0 million, subject to lender approval. Borrowings under the revolving credit facility bear interest at LIBOR plus 85 to 155 basis points, depending on the Company’s credit rating. Additionally, the Company is required to pay a facility fee at an annual rate of 0 to 55 basis points of the total amount of the revolving credit facility, depending on the Company’s credit rating. The Credit Agreement contains certain financial covenants, including a maximum leverage ratio, a minimum fixed charge coverage ratio, and a maximum percentage of secured debt to total asset value. As of September 30, 2018, and December 31, 2017, the Company had $14.0 million, of outstanding borrowings under the revolving credit facility, respectively, bearing weighted average interest rates of approximately 3.2% and 2.6%, respectively. As of September 30, 2018, $311.0 million was available for borrowing under the revolving credit facility and the Company was in compliance with the credit agreement covenants. Debt Maturities The following table presents scheduled principal payments related to our debt as of September 30, 2018 (in thousands):
|  | Scheduled |  |  | Balloon |  |  |  |
|  | Principal |  |  | Payment |  |  | Total |
Remainder of 2018 |  | $ | 850 |  |  | $ | - |  |  | $ | 850 |
2019 |  |  | 3,005 |  |  |  | 39,790 |  |  |  | 42,795 |
2020 |  |  | 1,100 |  |  |  | 2,767 |  |  |  | 3,867 |
2021 (1) |  |  | 998 |  |  |  | 14,000 |  |  |  | 14,998 |
2022 |  |  | 1,060 |  |  |  | - |  |  |  | 1,060 |
Thereafter |  |  | 3,687 |  |  |  | 552,656 |  |  |  | 556,343 |
Total |  | $ | 10,700 |  |  | $ | 609,213 |  |  | $ | 619,913 |
| (1) | The balloon payment balance includes the balance outstanding under the Credit Facility as of September 30, 2018. The Credit Facility matures in January 2021, with options to extend the maturity for one year at the Company’s election, 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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