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MORTGAGE AND OTHER INDEBTEDNESS | 9 Months Ended
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Sep. 30, 2023
Debt Disclosure [Abstract] |
MORTGAGE AND OTHER INDEBTEDNESS | MORTGAGE AND OTHER INDEBTEDNESS The following table summarizes the Company’s indebtedness as of September 30, 2023 and December 31, 2022 (in thousands):
| September 30, 2023 |  | December 31, 2022
Mortgages payable | $ | 154,567 |  |  | $ | 233,621 |
Senior unsecured notes | 1,829,635 |  |  | 1,924,635 |
Unsecured term loans | 820,000 |  |  | 820,000 |
Unsecured revolving line of credit | 39,000 |  |  | — |
| 2,843,202 |  |  | 2,978,256 |
Unamortized discounts and premiums, net | 35,721 |  |  | 44,362 |
Unamortized debt issuance costs, net | (10,095) |  |  | (12,319) |
Total mortgage and other indebtedness, net | $ | 2,868,828 |  |  | $ | 3,010,299 |
Consolidated indebtedness, including weighted average interest rates and weighted average maturities as of September 30, 2023, considering the impact of interest rate swaps, is summarized below (dollars in thousands):
| Amount Outstanding |  | Ratio |  | Weighted Average Interest Rate |  | Weighted Average Years to Maturity
Fixed rate debt(1) | $ | 2,631,602 |  |  | 93 | % |  | 4.01 | % |  | 4.2
Variable rate debt(2) | 211,600 |  |  | 7 | % |  | 8.58 | % |  | 3.1
Debt discounts, premiums and issuance costs, net | 25,626 |  |  | N/A |  | N/A |  | N/A
Total | $ | 2,868,828 |  |  | 100 | % |  | 4.35 | % |  | 4.1
(1)Fixed rate debt includes the portion of variable rate debt that has been hedged by interest rate swaps. As of September 30, 2023, $820.0 million in variable rate debt is hedged to a fixed rate for a weighted average of 1.9 years. (2)Variable rate debt includes the portion of fixed rate debt that has been hedged by interest rate swaps. As of September 30, 2023, $155.0 million in fixed rate debt is hedged to a floating rate for a weighted average of 1.9 years. Mortgages Payable The following table summarizes the Company’s mortgages payable (dollars in thousands):
| September 30, 2023 |  | December 31, 2022
| Balance |  | Weighted Average Interest Rate |  | Weighted Average Years to Maturity |  | Balance |  | Weighted Average Interest Rate |  | Weighted Average Years to Maturity
Fixed rate mortgages payable(1) | $ | 136,967 |  |  | 5.09 | % |  | 8.3 |  | $ | 205,328 |  |  | 3.98 | % |  | 1.4
Variable rate mortgage payable(2) | 17,600 |  |  | 7.54 | % |  | 3.8 |  | 28,293 |  |  | 5.96 | % |  | 0.6
Total mortgages payable | $ | 154,567 |  |  |  |  |  |  | $ | 233,621 |  |  |  |  |
(1)The fixed rate mortgages had interest rates ranging from 3.75% to 5.73% as of September 30, 2023 and December 31, 2022. (2)During the three months ended September 30, 2023, the interest rate on the variable rate mortgage increased to Bloomberg Short Term Bank Yield Index (“BSBY”) plus 215 basis points from BSBY plus 160 basis points in conjunction with the July 2023 amendment of the loan agreement. The one-month BSBY rate was 5.39% and 4.36% as of September 30, 2023 and December 31, 2022, respectively. Mortgages payable, which are secured by certain real estate and, in some cases, by guarantees from the Operating Partnership, are generally due in monthly installments of principal and interest and mature over various terms through 2033. During the nine months ended September 30, 2023, we (i) originated a 10-year $95.1 million mortgage payable at a fixed interest rate of 5.36% secured by the multifamily rental portion of the expansion project at One Loudoun Downtown – Pads G & H, (ii) amended the loan agreement on the variable rate mortgage secured by Delray Marketplace to extend the maturity date to August 4, 2026, with a one-year extension option, and made a $9.9 million paydown of the principal balance using available cash on hand, (iii) repaid mortgages payable totaling $161.5 million that had a weighted average fixed interest rate of 3.85%, and (iv) made scheduled principal payments of $2.7 million related to amortizing loans. Unsecured Notes The following table summarizes the Company’s senior unsecured notes and exchangeable senior notes (dollars in thousands):
|  |  | September 30, 2023 |  | December 31, 2022
| Maturity Date |  | Balance |  | Interest Rate |  | Balance |  | Interest Rate
Senior notes – 4.23% due 2023 | September 10, 2023 |  | $ | — |  |  | — | % |  | $ | 95,000 |  |  | 4.23 | %
Senior notes – 4.58% due 2024 | June 30, 2024 |  | 149,635 |  |  | 4.58 | % |  | 149,635 |  |  | 4.58 | %
Senior notes – 4.00% due 2025 | March 15, 2025 |  | 350,000 |  |  | 4.00 | % |  | 350,000 |  |  | 4.00 | %
Senior notes – SOFR + 3.65% due 2025(1) | September 10, 2025 |  | 80,000 |  |  | 9.17 | % |  | 80,000 |  |  | 8.41 | %
Senior notes – 4.08% due 2026 | September 30, 2026 |  | 100,000 |  |  | 4.08 | % |  | 100,000 |  |  | 4.08 | %
Senior notes – 4.00% due 2026 | October 1, 2026 |  | 300,000 |  |  | 4.00 | % |  | 300,000 |  |  | 4.00 | %
Senior exchangeable notes – 0.75% due 2027 | April 1, 2027 |  | 175,000 |  |  | 0.75 | % |  | 175,000 |  |  | 0.75 | %
Senior notes – SOFR + 3.75% due 2027(2) | September 10, 2027 |  | 75,000 |  |  | 9.27 | % |  | 75,000 |  |  | 8.51 | %
Senior notes – 4.24% due 2028 | December 28, 2028 |  | 100,000 |  |  | 4.24 | % |  | 100,000 |  |  | 4.24 | %
Senior notes – 4.82% due 2029 | June 28, 2029 |  | 100,000 |  |  | 4.82 | % |  | 100,000 |  |  | 4.82 | %
Senior notes – 4.75% due 2030 | September 15, 2030 |  | 400,000 |  |  | 4.75 | % |  | 400,000 |  |  | 4.75 | %
Total senior unsecured notes |  |  | $ | 1,829,635 |  |  |  |  | $ | 1,924,635 |  |  |
(1)On July 1, 2023, the fallback rate in the derivative agreement went into effect. As of September 30, 2023, $80,000 of 4.47% senior unsecured notes has been swapped to a variable rate of three-month Secured Overnight Financing Rate (“SOFR”) plus 3.65% through September 10, 2025. As of December 31, 2022, $80,000 of 4.47% senior unsecured notes had been swapped to a variable rate of three-month London Interbank Offered Rate (“LIBOR”) plus 3.65%. (2)On July 1, 2023, the fallback rate in the derivative agreement went into effect. As of September 30, 2023, $75,000 of 4.57% senior unsecured notes has been swapped to a variable rate of three-month SOFR plus 3.75% through September 10, 2025. As of December 31, 2022, $75,000 of 4.57% senior unsecured notes had been swapped to a variable rate of three-month LIBOR plus 3.75%. During the three months ended September 30, 2023, the Company repaid the $95.0 million principal balance of the 4.23% senior unsecured notes due 2023 using available cash on hand. Unsecured Term Loans and Revolving Line of Credit The following table summarizes the Company’s term loans and revolving line of credit (dollars in thousands):
|  |  | September 30, 2023 |  | December 31, 2022
| Maturity Date |  | Balance |  | Interest Rate |  | Balance |  | Interest Rate
Unsecured term loan due 2024 – fixed rate(1) | July 17, 2024 |  | $ | 120,000 |  |  | 2.68 | % |  | $ | 120,000 |  |  | 2.68 | %
Unsecured term loan due 2025 – fixed rate(2) | October 24, 2025 |  | 250,000 |  |  | 5.09 | % |  | 250,000 |  |  | 5.09 | %
Unsecured term loan due 2026 – fixed rate(3) | July 17, 2026 |  | 150,000 |  |  | 2.73 | % |  | 150,000 |  |  | 2.73 | %
Unsecured term loan due 2029 – fixed rate(4) | July 29, 2029 |  | 300,000 |  |  | 4.05 | % |  | 300,000 |  |  | 4.05 | %
Total unsecured term loans |  |  | $ | 820,000 |  |  |  |  | $ | 820,000 |  |  |
Unsecured credit facility revolving line of credit – variable rate(5) | January 8, 2026 |  | $ | 39,000 |  |  | 6.51 | % |  | $ | — |  |  | 5.56 | %
(1)$120,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 1.58% plus a credit spread based on a ratings grid ranging from 0.80% to 1.65% through July 17, 2024. The applicable credit spread was 1.10% as of September 30, 2023 and December 31, 2022. (2)$250,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 5.09% through October 24, 2025. The maturity date of the term loan may be extended for up to three additional periods of one year each at the Operating Partnership’s option, subject to certain conditions. (3)$150,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 1.68% plus a credit spread based on a ratings grid ranging from 0.75% to 1.60% through July 17, 2026. The applicable credit spread was 1.05% as of September 30, 2023 and December 31, 2022. (4)$300,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 2.70% plus a credit spread based on a ratings grid ranging from 1.15% to 2.20% through November 22, 2023. The applicable credit spread was 1.35% as of September 30, 2023 and December 31, 2022. (5)The revolving line of credit has two six-month extension options that the Company can exercise, at its election, subject to (i) customary representations and warranties, including, but not limited to, the absence of an event of default as defined in the unsecured credit agreement and (ii) payment of an extension fee equal to 0.075% of the revolving line of credit capacity. Unsecured Revolving Credit Facility In July 2022, the Operating Partnership, as borrower, and the Company entered into the Second Amendment (the “Second Amendment”) to the Sixth Amended and Restated Credit Agreement, dated as of July 8, 2021 (as amended, the “Credit Agreement”) with a syndicate of financial institutions to provide for an unsecured revolving credit facility aggregating $1.1 billion (the “Revolving Facility”) and a seven-year $300.0 million unsecured term loan (the “$300M Term Loan”). Under the Second Amendment, the Operating Partnership has the option, subject to certain customary conditions, to increase the Revolving Facility and/or incur additional term loans in an aggregate amount for all such increases and additional loans of up to $600.0 million, for a total facility amount of up to $2.0 billion. The Revolving Facility has a scheduled maturity date of January 8, 2026, which maturity date may be extended for up to two additional periods of six months at the Operating Partnership’s option, subject to certain conditions. Borrowings under the Revolving Facility bear interest at a rate per annum equal to SOFR plus a margin based on the Operating Partnership’s leverage ratio or credit rating, respectively, plus a facility fee based on the Operating Partnership’s leverage ratio or credit rating, respectively. The SOFR rate is also subject to an additional 0.10% spread adjustment as specified in the Second Amendment. The Revolving Facility is currently priced on the leverage-based pricing grid. In accordance with the Credit Agreement, the credit spread set forth in the leverage grid resets quarterly based on the Company’s leverage, as calculated at the previous quarter end. The Company may irrevocably elect to convert to the ratings-based pricing grid at any time. As of September 30, 2023, making such an election would have resulted in a lower interest rate; however, the Company had not made the election to convert to the ratings-based pricing grid. The Credit Agreement includes a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth therein. The following table summarizes the key terms of the Revolving Facility as of September 30, 2023 (dollars in thousands):
|  |  |  |  |  |  |  | Leverage-Based Pricing |  | Investment Grade Pricing |  |
Credit Agreement |  | Maturity Date |  | Extension Option |  | Extension Fee |  | Credit Spread |  | Facility Fee |  | Credit Spread |  | Facility Fee |  | SOFR Adjustment
$1,100,000 unsecured revolving line of credit |  | 1/8/2026 |  | 2 six-month |  | 0.075% |  | 1.05%–1.50% |  | 0.15%–0.30% |  | 0.725%–1.40% |  | 0.125%–0.30% |  | 0.10%
The Operating Partnership’s ability to borrow under the Credit Agreement is subject to ongoing compliance by the Operating Partnership and its subsidiaries with various restrictive covenants, including with respect to liens, transactions with affiliates, dividends, mergers and asset sales. In addition, the Credit Agreement requires that the Operating Partnership satisfy certain financial covenants, including (i) a maximum leverage ratio; (ii) a minimum fixed charge coverage ratio; (iii) a maximum secured indebtedness ratio; (iv) a maximum unsecured leverage ratio; and (v) a minimum unencumbered interest coverage ratio. As of September 30, 2023, we were in compliance with all such covenants. As of September 30, 2023, we had letters of credit outstanding totaling $0.3 million, against which no amounts were advanced as of September 30, 2023. Unsecured Term Loans As of September 30, 2023, the Operating Partnership has the following unsecured term loans: (i) a $120.0 million unsecured term loan due July 2024 (the “$120M Term Loan”), (ii) a $250.0 million unsecured term loan due October 2025 (the “$250M Term Loan”), (iii) a $150.0 million unsecured term loan due July 2026 (the “$150M Term Loan”), and (iv) the $300M Term Loan that matures in July 2029, each of which bears interest at a rate of SOFR plus a credit spread. The $120M Term Loan, $150M Term Loan and $300M Term Loan are each priced on a ratings-based pricing grid while the $250M Term Loan is priced on a leverage-based pricing grid. The agreements related to the $150M Term Loan and $300M Term Loan include a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth in each agreement. The following table summarizes the key terms of the unsecured term loans as of September 30, 2023 (dollars in thousands):
Unsecured Term Loans |  | Maturity Date |  | Leverage-Based Pricing Credit Spread |  | Investment Grade Pricing Credit Spread |  | SOFR Adjustment
$120,000 unsecured term loan due 2024 |  | 7/17/2024 |  | 1.20% – 1.70% |  | 0.80% – 1.65% |  | 0.10%
$250,000 unsecured term loan due 2025 |  | 10/24/2025(1) |  | 2.00% – 2.55% |  | 2.00% – 2.50% |  | 0.10%
$150,000 unsecured term loan due 2026 |  | 7/17/2026 |  | 1.20% – 1.70% |  | 0.75% – 1.60% |  | 0.10%
$300,000 unsecured term loan due 2029 |  | 7/29/2029 |  | N/A |  | 1.15% – 2.20% |  | 0.10%
(1)The 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. Under the agreement related to the $120M Term Loan and the $150M Term Loan, the Operating Partnership has the option to increase each of the term loans to $250.0 million upon the Operating Partnership’s request, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts. The Operating Partnership is permitted to prepay each of the $120M Term Loan and $150M Term Loan, in whole or in part, at any time without being subject to a prepayment fee. The Operating Partnership has the option to increase the $250M Term Loan to $300.0 million, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts. The Operating Partnership is permitted to prepay the $250M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before October 25, 2023. The Operating Partnership is permitted to prepay the $300M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before July 29, 2024. The unsecured term loan agreements contain representations, financial and other affirmative and negative covenants and events of default that are substantially similar to those contained in the Credit Agreement. The unsecured term loan agreements all rank pari passu with the Operating Partnership’s Revolving Facility and other unsecured indebtedness of the Operating Partnership. Debt Issuance Costs Debt issuance costs are amortized over the terms of the respective loan agreements. The following amounts of amortization of debt issuance costs are included as a component of “Interest expense” in the accompanying consolidated statements of operations and comprehensive income (in thousands):
| Nine Months Ended September 30,
| 2023 |  | 2022
Amortization of debt issuance costs | $ | 2,685 |  |  | $ | 2,169 |
Fair Value of Fixed and Variable Rate Debt As of September 30, 2023, the estimated fair value of fixed rate debt was $1.8 billion compared to the book value of $2.0 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 6.22% to 8.20%. As of September 30, 2023, the estimated fair value of variable rate debt was $880.2 million compared to the book value of $876.6 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 6.47% to 7.42%.

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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/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//470/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I + Details
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