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Mortgage and Other Indebtedness | 9 Months Ended
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Sep. 30, 2021
Debt Disclosure [Abstract] |
Mortgage and Other Indebtedness | Mortgage and Other Indebtedness Mortgage and other indebtedness consisted of the following as of September 30, 2021 and December 31, 2020:
| As of September 30, 2021
| Principal |  | Unamortized Net Premiums |  | Unamortized Debt Issuance Costs |  | Total
Senior unsecured notes—fixed rate | $ | 550,000 |  |  | $ | — |  |  | $ | (3,556) |  |  | $ | 546,444 |
Exchangeable senior notes - fixed rate | 175,000 |  |  | — |  |  | (5,052) |  |  | 169,948 |
Unsecured revolving credit facility | — |  |  | — |  |  | (1,253) |  |  | (1,253) |
Unsecured term loan | 250,000 |  |  | — |  |  | (1,488) |  |  | 248,512 |
Mortgage notes payable—fixed rate | 294,787 |  |  | 1,400 |  |  | (14) |  |  | 296,173 |
Mortgage note payable—variable rate | 29,193 |  |  | — |  |  | (23) |  |  | 29,170 |
Total mortgage and other indebtedness | $ | 1,298,980 |  |  | $ | 1,400 |  |  | $ | (11,386) |  |  | $ | 1,288,994 |
| As of December 31, 2020
| Principal |  | Unamortized Net Premiums |  | Unamortized Debt Issuance Costs |  | Total
Senior unsecured notes - fixed rate | $ | 550,000 |  |  | $ | — |  |  | $ | (3,595) |  |  | $ | 546,405 |
Unsecured revolving credit facility | 25,000 |  |  | — |  |  | (1,672) |  |  | 23,328 |
Unsecured term loans | 250,000 |  |  | — |  |  | (1,647) |  |  | 248,353 |
Mortgage notes payable - fixed rate | 295,966 |  |  | 1,732 |  |  | (25) |  |  | 297,673 |
Mortgage notes payable - variable rate | 55,110 |  |  | — |  |  | (75) |  |  | 55,035 |
Total mortgage and other indebtedness | $ | 1,176,076 |  |  | $ | 1,732 |  |  | $ | (7,014) |  |  | $ | 1,170,794 |
Consolidated indebtedness, including weighted average maturities and weighted average interest rates as of September 30, 2021, considering the impact of interest rate swaps, is summarized below:
| Outstanding Amount |  | Ratio |  | Weighted Average Interest Rate |  | Weighted Average Maturity (in years) |
Fixed Rate Debt 1 | $ | 1,114,787 |  |  | 86 | % |  | 3.78 | % |  | 4.3 |
Variable Rate Debt 2 | 184,193 |  |  | 14 | % |  | 3.48 | % |  | 4.2 |
Net Debt Premiums and Issuance Costs, Net | (9,986) |  |  | N/A |  | N/A |  | N/A |
Total | $ | 1,288,994 |  |  | 100 | % |  | 3.74 | % |  | 4.3 |
____________________ |  |
1 | Fixed rate debt includes, and variable rate debt excludes, the portion of such debt that has been hedged by interest rate derivatives. As of September 30, 2021, $250 million in variable rate debt is hedged to a fixed rate for a weighted average of 4.1 years.
2 | Variable rate debt includes, and fixed rate debt excludes, the portion of such debt that has been hedged to a floating rate. As of September 30, 2021, $155 million in fixed rate debt is hedged to floating rate for a weighted average of 3.9 years.
Mortgage indebtedness is collateralized by certain real estate properties and leases, and is generally due in monthly installments of interest and principal and matures over various terms through 2030. Variable interest rates on mortgage indebtedness is based on LIBOR plus 160 basis points. At September 30, 2021, the one-month LIBOR interest rate was 0.13%. Fixed interest rates on mortgage indebtedness range from 3.78% to 5.73%. Debt Issuance Costs Debt issuance costs are amortized on a straight-line basis over the terms of the respective loan agreements. The accompanying consolidated statements of operations include amortization of debt issuance costs as a component of interest expense as follows:
|  | Nine Months Ended September 30,
|  | 2021 |  | 2020
Amortization of debt issuance costs |  | $ | 1,963 |  |  | $ | 1,640 |
Unsecured Revolving Credit Facility and Unsecured Term Loans As of September 30, 2021, we had an unsecured revolving credit facility (the "Credit Facility") with a total commitment of $600 million that matures in April 2023 (inclusive of one twelve-month extension option). The Operating Partnership has the option to increase the borrowing availability of the Credit Facility to $1.2 billion, subject to certain conditions, including obtaining commitments from lenders. On October 25, 2018, the Operating Partnership entered into a Term Loan Agreement (the “Agreement”) with KeyBank National Association, as Administrative Agent (the “Agent”), and the other lenders party thereto, providing for an unsecured term loan facility of up to $250 million (the “Term Loan”). The Term Loan ranks pari passu with the Operating Partnership’s existing Credit Facility documented in the Operating Partnership’s Fifth Amended and Restated Credit Agreement, dated as of July 28, 2016, as amended (the “Existing Credit Agreement”), and other unsecured indebtedness of the Operating Partnership. The Term Loan has a scheduled maturity date of October 24, 2025, which maturity date may be extended for up to three additional periods of one year each at the Operating Partnership’s option subject to certain conditions. The Operating Partnership has the option to increase the Term Loan to $300 million, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Agreement, to provide such increased amounts. The Operating Partnership is permitted to prepay the Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before October 25, 2023. As of September 30, 2021, there was zero outstanding under the Credit Facility. Additionally, we had letters of credit outstanding which totaled $1.2 million, against which no amounts were advanced as of September 30, 2021. The amount that we may borrow under our Credit Facility is limited by the value of the assets in our unencumbered asset pool. As of September 30, 2021, the value of the assets in our unencumbered asset pool, calculated pursuant to the Credit Facility agreement, was $1.4 billion. Considering outstanding borrowings on the line of credit, term loans, unsecured notes and letters of credit, we had $416.7 million available under our Credit Facility for future borrowings as of September 30, 2021. Our ability to borrow under the Credit Facility is subject to our compliance with various restrictive and financial covenants, including with respect to liens, indebtedness, investments, dividends, mergers and asset sales. As of September 30, 2021, we were in compliance with all such covenants. Exchangeable Senior Notes In March 2021, the Operating Partnership issued $175.0 million aggregate principal amount of 0.75% Exchangeable Senior Notes maturing in April 2027 (the "Exchangeable Notes"). The Exchangeable Notes are governed by an indenture between the Operating Partnership, the Company and U.S. Bank National Association, as trustee. The Exchangeable Notes were sold in the United States only to accredited investors pursuant to an exemption from the Securities Act of 1933, as amended (the “Securities Act”), and subsequently resold to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The net proceeds from the offering of the Exchangeable Notes were approximately $169.7 million after deducting the underwriting fees and other expenses paid by the Company. The Exchangeable Notes bear interest at a rate of 0.75% per annum, payable semi-annually in arrears. The Exchangeable Notes will mature on April 1, 2027. The interest expense recognized for the Exchangeable Notes was approximately $0.5 million and $1.1 million for the three and nine months ended September 30, 2021, respectively. Prior to January 1, 2027, the Exchangeable Notes will be exchangeable into cash up to the principal amount of the Exchangeable Notes exchanged and, if applicable, cash or common shares or a combination thereof, only upon certain circumstances and during certain periods. On or after January 1, 2027, the Exchangeable Notes will be exchangeable into cash up to the principal amount of the Exchangeable Notes exchanged and, if applicable, cash or common shares or a combination thereof at the option of the holders at any time prior to the close of business on the second scheduled trading day preceding the Maturity Date. The exchange rate will initially equal 39.6628 common shares per $1,000 principal amount of Exchangeable Notes (equivalent to an exchange price of approximately $25.21 per common share and an exchange premium of approximately 25% based on the closing price of $20.17 per common share on March 17, 2021). The exchange rate will be subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. The Operating Partnership may redeem the Exchangeable Notes, at its option, in whole or in part, on any business day on or after April 5, 2025, if the last reported sale price of the common shares has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Issuer provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In connection with the Exchangeable Notes, the Operating Partnership entered into privately negotiated capped call transactions (the "Capped Call Transactions") with certain of the initial purchasers of the Exchangeable Notes or their respective affiliates. The Capped Call Transactions initially cover, subject to anti-dilution adjustments substantially similar to those applicable to the Exchangeable Notes, the number of common shares underlying the Exchangeable Notes. The Capped Call Transactions are expected generally to reduce the potential dilution to holders of common shares upon exchange of the Exchangeable Notes. The cap price of the Capped Call Transactions was initially approximately $30.26, which represents a premium of approximately 50% over the last reported sale price of common shares on March 17, 2021, and is subject to anti-dilution adjustments under the terms of the Capped Call Transactions. The cost of the Capped Call Transactions was $9.8 million and was recorded within additional paid-in capital. Senior Unsecured Notes The Operating Partnership has $550 million of senior unsecured notes maturing at various dates through September 2027 (the "Notes"). The Notes contain a number of customary financial and restrictive covenants. As of September 30, 2021, we were in compliance with all such covenants. Fair Value of Fixed and Variable Rate Debt As of September 30, 2021, the estimated fair value of our fixed rate debt was $1.1 billion compared to the book value of $1.0 billion. The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 2.78% to 3.87%. As of September 30, 2021, the fair value of variable rate debt was $279.0 million compared to the book value of $279.2 million. The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 2.77% to 3.52%.

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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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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