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Debt | 12 Months Ended
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Dec. 31, 2019
Debt |
Debt | Note 5 – Debt As of December 31, 2019, we had total gross indebtedness of $876.1 million, including (i) $37.1 million of mortgage notes payable; (ii) $240.0 million of unsecured term loans; (iii) $510.0 million of senior unsecured notes; and (iv) $89.0 million of borrowings under our Revolving Credit Facility. Mortgage Notes Payable As of December 31, 2019, the Company had total gross mortgage indebtedness of $37.1 million which was collateralized by related real estate and tenants’ leases with an aggregate net book value of $48.4 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 4.40% as of December 31, 2019 and 4.13% as of December 31, 2018. Mortgages payable consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, 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 made in October 2019 | ​ | $ | — | ​ | $ | 21,500
​ | ​ |  |  | ​ |  |
Note payable in monthly installments of $153,838, including interest at 6.90% per annum, 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 | ​ |  | 2,775 | ​ |  | 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 | ​ |  | 4,779 | ​ |  | 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 | ​ |  | 5,921 | ​ |  | 6,626
​ | ​ |  |  | ​ |  |
Total principal | ​ |  | 37,115 | ​ |  | 61,519
Unamortized debt issuance costs | ​ |  | (417) | ​ |  | (593)
Total | ​ | $ | 36,698 | ​ | $ | 60,926
​ 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, 2019, 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. Unsecured Term Loan Facilities The following table presents the Unsecured Term Loans balance net of unamortized debt issuance costs as of December 31, 2019 and 2018 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, 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 | ​ |  | (2,597) | ​ |  | (2,124)
Total | ​ | $ | 237,403 | ​ | $ | 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. The 2019 Term Loan was repaid in May 2019 at maturity. 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 agreement to fix LIBOR at 140 basis points until maturity. As of December 31, 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. Pursuant to the amended and restated credit agreement, described below, and its predecessor credit facility, the Company has outstanding $65.0 million and $35.0 million unsecured term loans maturing in January 2024 (together, the “2024 Term Loan Facilities”). Effective with the amended and restated credit agreement, borrowings under the 2024 Term Loan Facilities bear interest at a rate per annum equal to, at the option of the Company, (i) LIBOR plus a margin that is based upon the Company's credit rating or (ii) the Base Rate (which is defined as the greater of the rate of interest as publicly announced from time to time by PNC Bank, National Association, as its prime rate, the Federal Funds Open Rate plus 0.50%, or the Daily Eurodollar Rate plus 1.0%) plus a margin that is based upon the Company’s credit rating. The margins for the 2024 Term Loan Facilities range in amount from 0.85% to 1.65% for LIBOR-based loans and 0.00% to 0.65% for Base Rate loans, depending on the Company’s credit rating. The Company has utilized existing interest rate swaps to fix LIBOR at 2.0904% through July 2021 for the $65.0 million term loan and at 2.1970% through September 2020 for the $35.0 million term loan. In October 2019, the Company entered into new interest swap agreements to fix LIBOR at 143 basis points for both the $65.0 million and $35.0 million term loans, through their 2024 maturity dates. 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 interest rate swap agreements to fix LIBOR at 266 basis points until maturity. As of December 31, 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 swaps. Senior Unsecured Notes The following table presents the Senior Unsecured Notes balance net of unamortized debt issuance costs as of December 31, 2019, and 2018 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, 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
2031 Senior Unsecured Notes | ​ |  | 125,000 | ​ | ​ | —
Total Principal | ​ |  | 510,000 | ​ |  | 385,000
Unamortized debt issuance costs | ​ |  | (802) | ​ |  | (936)
Total | ​ | $ | 509,198 | ​ | $ | 384,064
​ All of 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 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”). 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”). In September 2017, the Company and 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”). 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”). In October 2019, the Company and the Operating Partnership closed on a private placement of $125.0 million of 4.47% senior unsecured notes due October 2031 (the “2031 Senior Unsecured 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 Senior Unsecured Notes, which resulted in an effective annual fixed rate of 4.41% for $100.0 million aggregate principal amount of the 2031 Senior Unsecured 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%. Senior Unsecured Revolving Credit Facility In December 2019, the Company entered into a Second Amended and Restated Revolving Credit and Term Loan Agreement (the “Credit Agreement”). The Credit Agreement provides for a $500.0 million unsecured revolving credit facility (the “Revolving Credit Facility”), a $65.0 million unsecured term loan facility and a $35.0 million unsecured term loan facility. The Credit Agreement amended and restated in its entirety the Company’s previous credit agreement dated December 15, 2016. The Credit Agreement provides $600.0 million unsecured borrowing capacity, composed of the Revolving Credit Facility, which matures on January 15, 2024, as well as the 2024 Term Loan Facilities, which mature on January 15, 2024. Subject to certain terms and conditions set forth in the Agreement, the Company (i) may request additional lender commitments under any or all facilities of up to an additional aggregate of $500.0 million and (ii) may elect, for an additional fee, to extend the maturity date of the Revolving Credit Facility by six months up to two times, for a maximum maturity date of January 15, 2025. No amortization payments are required under the Credit Agreement, and interest is payable in arrears no less frequently than quarterly. All borrowings under the Revolving Credit Facility(except for swing line loans) bear interest at a rate per annum equal to, at the option of the Company, (i) LIBOR plus a margin that is based upon the Company’s credit rating, or (ii) the Base Rate (which is defined as the greater of the rate of interest as publicly announced from time to time by PNC Bank, National Association, as its prime rate, the Federal Funds Open Rate plus 0.50%, or the Daily Eurodollar Rate plus 1.0%) plus a margin that is based upon the Company’s credit rating. The margins for the Revolving Credit Facility range in amount from 0.775% to 1.450% for LIBOR-based loans and 0.00% to 0.45% for Base Rate loans, depending on the Company’s credit rating. The margins for the Revolving Credit Facility are subject to improvement based on the Company’s leverage ratio, provided its credit rating meets a certain threshold. Concurrent with the amendment and restatement of the Company’s Credit Agreement, certain conforming changes, including customary financial covenants, were made to the 2023 Term Loan and 2026 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 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 obligations under the revolving credit facility is less than $14.0 million. Debt Maturities The following table presents scheduled principal payments related to our debt as of December 31, 2019 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Scheduled |  | Balloon |  | ​ | ​
​ | Principal | ​ | Payment | ​ | Total
2020 | $ | 948 | ​ | $ | 2,767 | ​ | $ | 3,715
2021 |  | 998 | ​ |  | — | ​ |  | 998
2022 |  | 1,060 | ​ |  | — | ​ |  | 1,060
2023 |  | 1,069 | ​ |  | 67,656 | ​ |  | 68,725
2024 (1) | ​ | 963 | ​ | ​ | 189,000 | ​ | ​ | 189,963
Thereafter |  | 1,654 | ​ |  | 610,000 | ​ |  | 611,654
Total | $ | 6,692 | ​ | $ | 869,423 | ​ | $ | 876,115
(1) | The balloon payment balance includes the balance outstanding under the Revolving Credit Facility as of December 31, 2019. The Credit Facility matures in January 2024, with options to extend the maturity as described under Senior Unsecured Revolving Credit Facility above.
​ Loan Covenants Certain loan agreements contain various restrictive covenants, including the following financial covenants: maximum total leverage ratio, maximum secured leverage ratios, consolidated net worth requirements, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, a minimum unsecured interest expense ratio, a minimum interest coverage ratio, a minimum unsecured debt yield and a minimum unencumbered interest expense ratio. As of December 31, 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 December 31, 2019.

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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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