XML 16 R13.htm IDEA: XBRL DOCUMENT
v3.19.3

Debt | 9 Months Ended
--- | ---
Sep. 30, 2019
Debt |
Debt | Note 5 – Debt As of September 30, 2019, the Company had total gross indebtedness of $931.9 million, including (i) $58.9 million of mortgage notes payable; (ii) $240.0 million of unsecured term loans; (iii) $385.0 million of senior unsecured notes; and (iv) $248.0 million of borrowings under the Company’s Credit Facility. Mortgage Notes Payable As of September 30, 2019, the Company had total gross mortgage indebtedness of $58.9 million which was collateralized by related real estate and tenants’ leases with an aggregate net book value of $89.7 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 4.02% as of September 30, 2019 and 4.13% as of December 31, 2018. ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, 2019 |  | December 31, 2018
(not presented in thousands) | ​ | (in thousands)
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 final monthly payment due January 2020 but early extinguished in September 2019 | ​ |  | — | ​ |  | 1,922
​ | ​ |  |  | ​ |  |
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 | ​ |  | 2,800 | ​ |  | 2,872
​ | ​ |  |  | ​ |  |
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 | ​ |  | 4,825 | ​ |  | 4,959
​ | ​ |  |  | ​ |  |
Note payable in monthly installments of $91,675 including interest at 6.27% per annum, with a final monthly payment due July 2026 | ​ |  | 6,102 | ​ |  | 6,626
​ | ​ |  |  | ​ |  |
Total principal | ​ |  | 58,867 | ​ |  | 61,519
Unamortized debt issuance costs | ​ |  | (444) | ​ |  | (593)
Total | ​ | $ | 58,423 | ​ | $ | 60,926
​ The mortgage loans encumbering the Company’s properties are generally non-recourse, subject to certain exceptions for which it 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, 2019, there were no mortgage loans with partial recourse to us. The Company had 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 the Company defaults 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 September 30, 2019, and December 31, 2018 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, 2019 |  | December 31, 2018
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 | ​ | ​ | 125,000
Total Principal | ​ |  | 385,000 | ​ |  | 385,000
Unamortized debt issuance costs | ​ |  | (829) | ​ |  | (936)
Total | ​ | $ | 384,171 | ​ | $ | 384,064
​ 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 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 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 its 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. In June 2019, the Operating Partnership entered into a note purchase agreement with institutional investors in connection with the private placement of $125.0 million aggregate principal amount of its 4.47% senior unsecured notes due October 2031 (the “2031 Senior Unsecured Notes”). The closing of the private placement and the issuance of the 2031 Senior Unsecured Notes took place in October 2019. The 2031 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. See Note 12 Subsequent Events in regards to sale of the notes. In March 2019, the Company entered into forward-starting interest rate swap agreements to fix the interest for $100.0 million of long-term debt until maturity. The Company terminated the swap agreements at the time of pricing the 2031 Notes, which resulted in an effective annual fixed rate of 4.41% for $100.0 million aggregate principal amount of the 2031 Notes. Considering the effect of the terminated swap agreements, the blended all-in rate to the Company for the $125.0 million aggregate principal amount of 2031 Senior Unsecured Notes is 4.42%. Unsecured Term Loan Facilities The following table presents the Unsecured Term Loans balance net of unamortized debt issuance costs as of September 30, 2019 and December 31, 2018 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, 2019 |  | December 31, 2018
2019 Term Loan | ​ | $ | — | ​ | $ | 18,543
2023 Term Loan | ​ |  | 40,000 | ​ |  | 40,000
2024 Term Loan Facilities | ​ | ​ | 100,000 | ​ | ​ | 100,000
2026 Term Loan | ​ |  | 100,000 | ​ |  | 100,000
Total Principal | ​ |  | 240,000 | ​ |  | 258,543
Unamortized debt issuance costs | ​ |  | (2,016) | ​ |  | (2,124)
Total | ​ | $ | 237,984 | ​ | $ | 256,419
​ In August 2016, the Company entered into a $20.3 million unsecured amortizing term loan that matured May 2019 (the “2019 Term Loan”). Borrowings under the 2019 Term Loan were 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. Including the swap, the 2019 Term Loan bore an all-in interest rate of 3.62%. The 2019 Term Loan was repaid upon maturity in May 2019. 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 its credit rating. The Company entered into an interest rate swap to fix LIBOR at 140 basis points until maturity. As of September 30, 2019, $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. 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 its credit rating. The Company utilized existing interest rate swaps to effectively fix the LIBOR at 213 basis points until September 2020 ($35 million facility) and July 2021 ($65 million facility) (refer to Note 7 – Derivative Instruments and Hedging Activity). As of September 30, 2019, $100.0 million was outstanding under the 2024 Term Loan Facilities bearing an all-in interest rate of 3.13%, including the swaps. 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 its credit rating. The Company entered into an interest rate swap to fix LIBOR at 266 basis points until maturity. As of September 30, 2019, $100.0 million was outstanding under the 2026 Term Loan, which was subject to an all-in interest rate of 4.26%, including the swap. Senior Unsecured Revolving Credit Facility In December 2016, the Company amended and restated the credit agreement (the “Credit Agreement”) that governs its senior unsecured revolving credit facility and its 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 its 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 its 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, 2019, and December 31, 2018, the Company had $248.0 million and $19.0 million of outstanding borrowings under the revolving credit facility, respectively, bearing weighted average interest rates of approximately 3.30% and 3.38%, respectively. As of September 30, 2019, $77.0 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 $14.0 million to the extent that the value of the Operating Partnership’s assets available to satisfy the Operating Partnership’s obligation under the revolving credit facility is less than $14.0 million. Debt Maturities The following table presents scheduled principal payments related to the Company’s debt as of September 30, 2019 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Scheduled |  | Balloon |  | ​ | ​
​ | Principal | ​ | Payment | ​ | Total
Remainder of 2019 | $ | 253 | ​ | $ | 21,500 | ​ | $ | 21,753
2020 |  | 947 | ​ |  | 2,767 | ​ |  | 3,714
2021 (1) |  | 998 | ​ |  | 248,000 | ​ |  | 248,998
2022 |  | 1,060 | ​ |  | — | ​ |  | 1,060
2023 | ​ | 1,069 | ​ | ​ | 67,656 | ​ | ​ | 68,725
Thereafter |  | 2,617 | ​ |  | 585,000 | ​ |  | 587,617
Total | $ | 6,944 | ​ | $ | 924,923 | ​ | $ | 931,867
(1) | The balloon payment balance includes the balance outstanding under the Credit Facility as of September 30, 2019. 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.
​ Loan Covenants Certain loan agreements contain various restrictive covenants, including the following financial covenants: maximum leverage ratio, maximum secured and secured recourse leverage ratios, minimum tangible net worth and consolidated net worth requirements, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, a minimum unsecured interest expense ratio, a minimum unencumbered interest expense ratio, and a maximum payout ratio. As of September 30, 2019, the most restrictive covenant was the minimum unencumbered interest expense ratio. The Company was in compliance with all of its loan covenants and obligations as of September 30, 2019.

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