XML 31 R11.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Debt | 12 Months Ended
--- | ---
Dec. 31, 2018
Debt Disclosure [Abstract] |
Debt Disclosure [Text Block] | Note 4 – Debt As of December 31, 2018, we had total indebtedness of $720.4 million, including (i) $60.9 million of mortgage notes payable; (ii) $256.4 million of unsecured term loans; (iii) $384.1 million of senior unsecured notes; and (iv) $19.0 million of borrowings under our Credit Facility. The Company was in compliance with covenant terms for all debt at December 31, 2018. Mortgage Notes Payable As of December 31, 2018, the Company had total gross mortgage indebtedness of $61.5 million which was collateralized by related real estate and tenants’ leases with an aggregate net book value of $108.0 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 4.13% as of December 31, 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%. Mortgages payable consisted of the following:
|  | December 31, 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 |  |  | 1,922 |  |  | 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 |  |  | 2,872 |  |  | 2,963
Note payable in monthly installments of interest only at 3.60% per annum, with a balloon payment due January 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 |  |  | 4,959 |  |  | 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 |  |  | 6,626 |  |  | 7,288
Total principal |  |  | 61,519 |  |  | 89,095
Unamortized debt issuance costs |  |  | (593) |  |  | (825)
Total |  | $ | 60,926 |  | $ | 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 December 31, 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. Senior Unsecured Notes The following table presents the Senior Unsecured Notes balance net of unamortized debt issuance costs as of December 31, 2018, and 2017 (in thousands):
|  | December 31, 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 |  |  | (936) |  |  | (878)
Total |  | $ | 384,064 |  | $ | 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 Noted”) and $50.0 million of 4.26% notes due May 2027 (the “2027 Senior Unsecured Notes”). The senior unsecured notes were sold only to institutional investors and did not involve a public offering in reliance of the exemption from registration in Section 4(a)(2) of the Securities Act. In July 2016, the Company and the Operating Partnership 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 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 and the Operating Partnership 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 4.19% senior unsecured notes due September 2029 (the “2029 Senior Unsecured Notes”). 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 and the Operating Partnership entered into two supplements to uncommitted master note facilities with institutional purchasers. Pursuant to the supplements, the Operating Partnership completed a private placement of $125.0 million aggregate principal amount of 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 December 31, 2018 and 2017 (in thousands):
|  | December 31, 2018 |  | December 31, 2017
2019 Term Loan |  | $ | 18,543 |  | $ | 19,304
2023 Term Loan |  |  | 40,000 |  |  | 40,000
2024 Term Loan Facilities |  |  | 100,000 |  |  | 100,000
2026 Term Loan |  |  | 100,000 |  |  | —
Total Principal |  |  | 258,543 |  |  | 159,304
Unamortized debt issuance costs |  |  | (2,124) |  |  | (1,133)
Total |  | $ | 256,419 |  | $ | 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 85 to 165 basis points, depending on the Company’s credit rating. The Company utilized existing interest rate swaps to effectively fix the LIBOR rate at 213 basis points until maturity (refer to Note 8 – Derivative Instruments and Hedging Activity). As of December 31, 2018, $100.0 million was outstanding under the 2024 Term Loan Facilities bearing an all-in interest rate of 3.13%, including the swaps. 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 85 to 165 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 December 31, 2018, $40.0 million was outstanding under the 2023 Term Loan, which was subject to an all-in interest rate of 2.40%, including the swap. 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 December 31, 2018, $18.5 million was outstanding under the 2019 Term Loan bearing an all-in interest rate of 3.62%, including the swap. In December 2018, the Company entered into a $100.0 million unsecured term loan facility that matures January 2026 (the “2026 Term Loan”). Borrowings under the 2026 Term Loan are priced at LIBOR plus 145 to 240 basis points, depending on the Company’s credit rating. The Company entered into an interest rate swap to fix LIBOR at 266 basis points until maturity. As of December 31, 2018, $100.0 million was outstanding under the 2026 Term Loan, which was subject to an all-in interest rate of 4.26%, including the swaps. 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 up to $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 December 31, 2018, and December 31, 2017, the Company had $19.0 million and $14.0 million of outstanding borrowings under the revolving credit facility, respectively, bearing weighted average interest rates of approximately 3.38% and 2.6%, respectively. As of December 31, 2018, $306.0 million was available for borrowing under the revolving credit facility and the Company was in compliance with the credit agreement covenants. Concurrent with the amendment and restatement of the Company’s senior unsecured revolving credit facility, conforming changes were made to the 2023 Term Loan and 2019 Term Loan. The Company and Richard Agree, the Executive Chairman of the Company, are parties to a Reimbursement Agreement dated November 18, 2014. Pursuant to the Reimbursement Agreement, Mr. Agree has agreed to reimburse the Company for any loss incurred under the unsecured revolving credit facility in an amount not to exceed $14 million to the extent that the value of the Operating Partnership’s assets available to satisfy the Operating Partnership’s obligations under the revolving credit facility is less than $14 million. Debt Maturities The following table presents scheduled principal payments related to our debt as of December 31, 2018 (in thousands):
|  | Scheduled |  | Balloon |  |  |
|  | Principal |  | Payment |  | Total
2019 |  | $ | 2,751 |  | $ | 40,044 |  | $ | 42,795
2020 |  |  | 1,100 |  |  | 2,767 |  |  | 3,867
2021 (1) |  |  | 998 |  |  | 19,000 |  |  | 19,998
2022 |  |  | 1,060 |  |  | — |  |  | 1,060
2023 |  |  | 1,069 |  |  | 67,656 |  |  | 68,725
Thereafter |  |  | 2,617 |  |  | 585,000 |  |  | 587,617
Total |  | $ | 9,595 |  | $ | 714,467 |  | $ | 724,062
| (1) |  | The balloon payment balance includes the balance outstanding under the Credit Facility as of December 31, 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.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration