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Indebtedness | 12 Months Ended
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Dec. 31, 2012
Indebtedness | 6. Indebtedness The following table discloses certain information regarding our indebtedness:
|  | Outstanding Balance at |  |  | Interest Rate at December 31, 2012 |  |  | Effective Interest Rate at Issuance |  |  | Maturity Date |
|  | December 31, 2012 |  |  | December 31, 2011 |  |  |  |
Mortgage and Other Loans Payable, Net |  | $ | 763,616 |  |  | $ | 690,256 |  |  |  | 4.03% – 8.26% |  |  |  | 4.03% – 8.26% |  |  |  | January 2014 – September 2022 |
Unamortized Premiums |  |  | (161 | ) |  |  | (305 | ) |  |  |  |  |  |  |  |  |  |  |  |
Mortgage and Other Loans Payable, Gross |  | $ | 763,455 |  |  | $ | 689,951 |  |  |  |  |  |  |  |  |  |  |  |  |
Senior Unsecured Notes, Net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2016 Notes |  | $ | 159,510 |  |  | $ | 159,455 |  |  |  | 5.750% |  |  |  | 5.91% |  |  |  | 01/15/16 |
2017 Notes |  |  | 55,385 |  |  |  | 59,600 |  |  |  | 7.500% |  |  |  | 7.52% |  |  |  | 12/01/17 |
2027 Notes |  |  | 6,066 |  |  |  | 6,065 |  |  |  | 7.150% |  |  |  | 7.11% |  |  |  | 05/15/27 |
2028 Notes |  |  | 55,261 |  |  |  | 124,894 |  |  |  | 7.600% |  |  |  | 8.13% |  |  |  | 07/15/28 |
2012 Notes |  |  | — |  |  |  | 61,817 |  |  |  | N/A |  |  |  | N/A |  |  |  | 04/15/12 |
2032 Notes |  |  | 11,500 |  |  |  | 34,683 |  |  |  | 7.750% |  |  |  | 7.87% |  |  |  | 04/15/32 |
2014 Notes |  |  | 79,683 |  |  |  | 86,997 |  |  |  | 6.420% |  |  |  | 6.54% |  |  |  | 06/01/14 |
2017 II Notes |  |  | 106,745 |  |  |  | 106,716 |  |  |  | 5.950% |  |  |  | 6.37% |  |  |  | 05/15/17 |
Subtotal |  | $ | 474,150 |  |  | $ | 640,227 |  |  |  |  |  |  |  |  |  |  |  |  |
Unamortized Discounts |  |  | 2,570 |  |  |  | 4,625 |  |  |  |  |  |  |  |  |  |  |  |  |
Senior Unsecured Notes, Gross |  | $ | 476,720 |  |  | $ | 644,852 |  |  |  |  |  |  |  |  |  |  |  |  |
Unsecured Credit Facility |  | $ | 98,000 |  |  | $ | 149,000 |  |  |  | 1.912% |  |  |  | 1.912% |  |  |  | 12/12/14 |
Mortgage and Other Loans Payable, Net During the years ended December 31, 2012 and 2011, we originated or assumed the following mortgage loans:
Mortgage Financing |  | Loan Principal |  |  | Interest Rate |  |  | Origination Date |  | Maturity Date |  | Amortization Period |  | Number of Industrial Properties Collateralizing Mortgage |  |  | GLA (In millions) |  |  | Property Carrying Value at December 31, 2012 |
I-VI |  | $ | 100,599 |  |  |  | 4.03 | % |  | August 29, 2012 |  | September 2022 |  | 30-year |  |  | 31 |  |  |  | 3.8 |  |  | $ | 103,671 |
Mortgage Financing |  | Loan Principal |  |  | Interest Rate |  |  | Origination/Assumption Date |  | Maturity Date |  | Amortization Period |  | Number of Industrial Properties Collateralizing Mortgage |  |  | GLA (In millions) |  |  | Property Carrying Value at December 31, 2011 |
VII-XIV |  | $ | 178,300 |  |  |  | 4.45 | % |  | May 2, 2011 |  | June 2018 |  | 30-year |  |  | 32 |  |  |  | 5.9 |  |  | $ | 206,291 |
XV |  |  | 24,417 |  |  |  | 5.579 | % |  | May 26, 2011 |  | February 2016 |  | 30-year |  |  | 1 |  |  |  | 0.7 |  |  |  | 28,991 |
XVI-XXVI |  |  | 77,600 |  |  |  | 4.85 | % |  | September 23, 2011 |  | October 2021 |  | 30-year |  |  | 24 |  |  |  | 2.3 |  |  |  | 84,403 |
|  | $ | 280,317 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 319,685 |
For Mortgage Financings I through XIV and Mortgage Financings XVI through XXVI, principal prepayments are prohibited for 12 months after loan origination, after which prepayment premiums are calculated at the greater of yield maintenance or 1% of the outstanding balance. For Mortgage Financing XV, principal prepayments are prohibited until three months prior to maturity, but defeasance is allowed subject to certain conditions. During the years ended December 31, 2012 and 2011, we paid off and retired prior to maturity mortgage loans payable in the amount of $14,112 and $62,662, respectively. In connection with these repurchases prior to maturity, we recognized $361 and $2,128 as loss from retirement of debt for the years ended December 31, 2012 and 2011, respectively. On September 20, 2011, we transferred title to a property totaling approximately 0.4 million square feet of GLA and an escrow balance in the amount of $1,845 to a lender in satisfaction of a $5,040 non-recourse mortgage loan. We recognized a $147 loss related to the transaction, which is included in loss from retirement of debt for the year ended December 31, 2011. As of December 31, 2012, mortgage loans payable are collateralized by, and in some instances cross-collateralized by, industrial properties with a net carrying value of $949,557. We believe the Operating Partnership and the Company were in compliance with all covenants relating to mortgage loans payable as of December 31, 2012. Senior Unsecured Notes, Net During the years ended December 31, 2012 and 2011, we repurchased and retired the following senior unsecured notes prior to maturity:
|  | Principal Amount Repurchased |  |  | Purchase Price |
|  | For the Year Ended December 31, 2012 |  |  | For the Year Ended December 31, 2011 |  |  | For the Year Ended December 31, 2012 |  |  | For the Year Ended December 31, 2011 |
2014 Notes |  | $ | 9,000 |  |  | $ | 1,144 |  |  | $ | 9,439 |  |  | $ | 1,143 |
2016 Notes |  |  | — |  |  |  | 500 |  |  |  | — |  |  |  | 475 |
2017 Notes |  |  | 4,223 |  |  |  | 27,619 |  |  |  | 4,632 |  |  |  | 27,506 |
2017 II Notes |  |  | — |  |  |  | 10,969 |  |  |  | — |  |  |  | 10,182 |
2027 Notes |  |  | — |  |  |  | 7,500 |  |  |  | — |  |  |  | 7,500 |
2028 Notes |  |  | 69,680 |  |  |  | 65,025 |  |  |  | 72,541 |  |  |  | 63,861 |
2032 Notes |  |  | 23,400 |  |  |  | — |  |  |  | 24,001 |  |  |  | — |
|  | $ | 106,303 |  |  | $ | 112,757 |  |  | $ | 110,613 |  |  | $ | 110,667 |
In connection with these repurchases prior to maturity, we recognized $9,323 and $2,012 as loss from retirement of debt for the years ended December 31, 2012 and 2011, respectively, which is the difference between the purchase price of $110,613 and $110,667, respectively, and the principal amount retired of $106,303 and $112,757, respectively, net of the pro rata write-off of the unamortized debt issue discount, the unamortized deferred financing costs, the unamortized settlement amount of the interest rate protection agreements and the professional services fees related to the repurchases of $598, $728, $3,247 and $440, respectively, and $135, $717, $3,250 and $0, respectively. On September 15, 2011, we paid off and retired our 4.625% Notes due 2011, at maturity, in the amount of $128,900. On April 16, 2012, we paid off and retired our 2012 Notes, at maturity, in the amount of $61,829. The indentures governing our senior unsecured notes contain certain financial covenants, including limitations on incurrence of debt and debt service coverage. We believe the Operating Partnership and the Company were in compliance with all covenants relating to senior unsecured notes as of December 31, 2012. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our noteholders in a manner that could impose and cause us to incur material costs. Unsecured Credit Facility We have maintained an unsecured credit facility since 1997. During December 2011, we entered into a $450,000 unsecured revolving credit agreement (the “Unsecured Credit Facility”) which replaced our previous unsecured credit facility. We may request that the borrowing capacity under the Unsecured Credit Facility be increased to $500,000, subject to certain restrictions. We wrote off $1,172 of unamortized deferred financing costs reflected in Loss from Retirement of Debt for the year ended December 31, 2011 related to our previous unsecured credit facility. At December 31, 2012, the Unsecured Credit Facility provides for interest only payments at LIBOR plus 170 basis points or at a base rate plus 170 basis points, at our election. The margin on our LIBOR or base rate borrowings could increase based on our leverage ratio. The Unsecured Credit Facility matures on December 12, 2014, unless extended an additional one year at our election, subject to certain conditions. At December 31, 2012, borrowings under the Unsecured Credit Facility bore interest at a weighted average interest rate of 1.912%. The Unsecured Credit Facility contains certain financial covenants, including limitations on incurrence of debt and debt service coverage. Under the Unsecured Credit Facility, an event of default can also occur if the lenders, in their good faith judgment, determine that a material adverse change has occurred which could prevent timely repayment or materially impair our ability to perform our obligations under the loan agreement. We believe that we were in compliance with all covenants relating to the Unsecured Credit Facility as of December 31, 2012. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our lenders in a manner that could impose and cause us to incur material costs. Indebtedness The following is a schedule of the stated maturities and scheduled principal payments of our indebtedness, exclusive of premiums and discounts, for the next five years ending December 31, and thereafter:
|  | Amount |
2013 |  | $ | 14,339 |
2014 |  |  | 234,097 |
2015 |  |  | 63,636 |
2016 |  |  | 295,309 |
2017 |  |  | 174,153 |
Thereafter |  |  | 556,641 |
Total |  | $ | 1,338,175 |
Fair Value At December 31, 2012 and 2011, the fair value of our indebtedness was as follows:
|  | December 31, 2012 |  |  | December 31, 2011 |
|  | Carrying Amount |  |  | Fair Value |  |  | Carrying Amount |  |  | Fair Value |
Mortgage and Other Loans Payable, Net |  | $ | 763,616 |  |  | $ | 814,915 |  |  | $ | 690,256 |  |  | $ | 743,419 |
Senior Unsecured Debt, Net |  |  | 474,150 |  |  |  | 516,943 |  |  |  | 640,227 |  |  |  | 630,622 |
Unsecured Credit Facility |  |  | 98,000 |  |  |  | 98,192 |  |  |  | 149,000 |  |  |  | 149,000 |
Total |  | $ | 1,335,766 |  |  | $ | 1,430,050 |  |  | $ | 1,479,483 |  |  | $ | 1,523,041 |
The fair values of our mortgage and other loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made based upon similar leverage levels and similar remaining maturities. The current market rates we utilized were internally estimated; therefore, we have concluded that our determination of fair value for our mortgage and other loans payable was primarily based upon Level 3 inputs. The fair value of the senior unsecured notes was determined by using rates, as advised by our bankers, that are based upon recent trades within the same series of the senior unsecured notes, recent trades for senior unsecured notes with comparable maturities, recent trades for fixed rate unsecured debt from companies with profiles similar to ours, as well as overall economic conditions. We have determined that our estimation of the fair value of fixed rate unsecured debt was primarily based upon Level 3 inputs. The fair value of the Unsecured Credit Facility was determined by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term, assuming no repayment until maturity. The current market rate utilized for our Unsecured Credit Facility was internally estimated; therefore, we have concluded that our determination of fair value was primarily based upon Level 3 inputs.

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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 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 Reference 2: 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 3: 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 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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