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Notes Payable | 12 Months Ended
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Dec. 31, 2022
Debt Disclosure [Abstract] |
NOTES PAYABLE | NOTES PAYABLE The following table summarizes the terms of notes payable outstanding at December 31, 2022 and 2021 ($ in thousands):
Description |  | Interest Rate (1) |  | Maturity (2) |  | 2022 |  | 2021
Unsecured Notes: |  |  |  |  |  |  |  |
Credit Facility |  | 5.30% |  | 2027 |  | $ | 56,600 |  |  | $ | 228,500 |
Term Loan |  | 5.45% |  | 2025 |  | 400,000 |  |  | — |
Term Loan |  | 5.38% |  | 2024 |  | 350,000 |  |  | 350,000 |
Senior Note |  | 3.95% |  | 2029 |  | 275,000 |  |  | 275,000 |
Senior Note |  | 3.91% |  | 2025 |  | 250,000 |  |  | 250,000 |
Senior Note |  | 3.86% |  | 2028 |  | 250,000 |  |  | 250,000 |
Senior Note |  | 3.78% |  | 2027 |  | 125,000 |  |  | 125,000 |
Senior Note |  | 4.09% |  | 2027 |  | 100,000 |  |  | 100,000 |
|  |  |  |  |  | 1,806,600 |  |  | 1,578,500 |
Secured Mortgage Notes: |  |  |  |  |  |  |  |
Fifth Third Center |  | 3.37% |  | 2026 |  | 130,168 |  |  | 133,672 |
Terminus (3) |  | 6.34% |  | 2031 |  | 221,000 |  |  | 184,239 |
Colorado Tower |  | 3.45% |  | 2026 |  | 109,552 |  |  | 112,150 |
Domain 10 |  | 3.75% |  | 2024 |  | 74,521 |  |  | 76,412 |
Promenade Tower (4) |  | 4.27% |  | 2022 |  | — |  |  | 89,052 |
Legacy Union One (4) |  | 4.24% |  | 2023 |  | — |  |  | 66,000 |
|  |  |  |  |  | 535,241 |  |  | 661,525 |
|  |  |  |  |  | $ | 2,341,841 |  |  | $ | 2,240,025 |
Unamortized premium |  |  |  |  |  | — |  |  | 3,910 |
Unamortized loan costs |  |  |  |  |  | (7,235) |  |  | (6,426) |
Total Notes Payable |  |  |  |  |  | $ | 2,334,606 |  |  | $ | 2,237,509 |
(1) Interest rate as of December 31, 2022. (2) Weighted average maturity of notes payable outstanding at December 31, 2022 was 4.0 years. (3) Represents $123.0 million and $98.0 million non-cross-collateralized mortgages secured by the Terminus 100 and Terminus 200, buildings, respectively. (4) These mortgages were paid off, in full, in October 2022. Credit Facility On May 2, 2022, the Company entered into a Fifth Amended and Restated Credit Agreement (the "Credit Facility") under which the Company may borrow up to $1 billion if certain conditions are satisfied. The Credit Facility recasts the Prior Facility by, among other things, extending the maturity date from January 3, 2023 to April 30, 2027, and reducing certain per annum variable interest rate spreads and other fees. The Credit Facility contains financial covenants consistent with those of the Prior Facility, with the exception of an increase in the secured leverage ratio to no more than 50%. The interest rate applicable to the Credit Facility varies according to the Company's leverage ratio and may, at the election of the Company, be determined based on either (1) the Daily Secured Overnight Financing Rate ("SOFR") or Term SOFR, plus a SOFR adjustment of 0.10% ("Adjusted SOFR") and a spread of between 0.90% and 1.40%, or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50%, Term SOFR, plus a SOFR adjustment of 0.10% and 1.00%, or 1.00%, plus a spread of between 0.00% and 0.40%, based on leverage. In addition to the interest rate, the Credit Facility is also subject to a facility fee of 0.15% to 0.30%, depending on leverage, on the entire $1 billion capacity. At December 31, 2022, the Credit Facility's interest rate spread over Adjusted SOFR was 0.90%, and the facility fee spread was 0.15%. The amount that the Company may draw under the Credit Facility is a defined calculation based on the Company's unencumbered assets and other factors. The total available borrowing capacity under the Credit Facility was $943.4 million at December 31, 2022. The amounts outstanding under the Credit Facility may be accelerated upon the occurrence of any events of default. Through May 2, 2022, the Company had a $1 billion senior unsecured line of credit (the "Prior Facility") that was scheduled to mature on January 3, 2023. The Prior Facility contained financial covenants that required, among other things, the maintenance of unencumbered interest coverage ratio of at least 1.75x; a fixed charge coverage ratio of at least 1.50x; a secured leverage ratio of no more than 40%; and an overall leverage ratio of no more than 60%. The Prior Facility also contained customary representations and warranties and affirmative and negative covenants, as well as customary events of default. The interest rate applicable to the Prior Facility varied according to the Company's leverage ratio, and was, at the election of the Company, determined based on either (1) LIBOR plus a spread of between 1.05% and 1.45%, or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50%, or the one-month LIBOR plus 1.0% (the "Base Rate"), plus a spread of between 0.10% or 0.45%, based on leverage. Term Loans On October 3, 2022, the Company entered into a Delayed Draw Term Loan Agreement (the "2022 Term Loan") and borrowed the full $400 million available under the loan. The loan matures on March 3, 2025 with four consecutive options to extend the maturity date for an additional six months. The interest rate provisions are the same as the 2021 Term Loan, and the covenants are the same as the Credit Facility. On June 28, 2021, the Company entered into an Amended and Restated Term Loan Agreement (the "2021 Term Loan") that amended the former term loan agreement. Under the 2021 Term Loan, the Company has borrowed $350 million that matures on August 30, 2024 with four consecutive options to extend the maturity date for an additional 180 days. On September 19, 2022, the Company entered into the First Amendment to the 2021 Term Loan. This amendment aligns covenants and available interest rates, including the addition of SOFR, to that of the Credit Facility. Under the terms of this First Amendment, the interest rate applicable to the 2021 Term Loan varies according to the Company's leverage ratio and may, at the election of the Company, be determined based on either (1) the Daily SOFR or Term SOFR, plus a SOFR adjustment of 0.10% ("Adjusted SOFR") and a spread of between 1.05% and 1.65%, or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50%, Term SOFR, plus a SOFR adjustment of 0.10% and 1.00%, or 1.00%, plus a spread of between 0.05% and 0.65%, based on leverage. On September 19, 2022, the Company provided notice of our election of the Daily SOFR Rate Loan provisions. On September 27, 2022, the Company entered into a floating-to-fixed interest rate swap with respect to the $350 million 2021 Term Loan through the maturity date of August 30, 2024. This swap effectively fixed the underlying SOFR rate at 4.23%. See note 10 for more information on this cash flow hedge. At December 31, 2022, the 2021 and 2022 Term Loan's spread over Adjusted SOFR rate was 1.05%. Unsecured Senior Notes The Company has unsecured senior notes of $1.0 billion that were funded in five tranches. The first tranche of $100 million is due in 2027 and has a fixed annual interest rate of 4.09%. The second tranche of $250 million is due in 2025 and has a fixed annual interest rate of 3.91%. The third tranche of $125 million is due in 2027 and has a fixed annual interest rate of 3.78%. The fourth tranche of $250 million is due in 2028 and has a fixed annual interest rate of 3.86%. The fifth tranche of $275 million is due in 2029 and has a fixed annual interest rate of 3.95%. The unsecured senior notes contain financial covenants that are consistent with those of our Credit Facility. The senior notes also contain customary representations and warranties and affirmative and negative covenants, as well as customary events of default. Secured Mortgage Notes In December 2022, the Company refinanced mortgages on the Company's two Terminus properties in Atlanta with the lender. Under the new mortgage, the maturities were extended from January 2023 to January 2031, the combined principal increased to $221.0 million, and the interest rate is now 6.34%. In October 2022, the Company paid off, in full, its Legacy Union One and Promenade Tower mortgages. In June 2021, the Company executed a collateral substitution for the mortgage previously secured by the Company's 816 Congress property in Austin, which was sold in December 2021. The mortgage is now secured by the Company's Domain 10 property in Austin. All other terms of the note were unchanged. As of December 31, 2022, the Company had $535.2 million outstanding on five non-recourse mortgage notes. All interest rates on the secured mortgage notes are fixed. Assets with depreciated carrying values of $910.2 million were pledged as security on these mortgage notes payable. Other Debt Information The Company is in compliance with all of the covenants related to its unsecured and secured debt. At December 31, 2022 and 2021, the estimated fair value of the Company’s notes payable was $2.2 billion and $2.3 billion, respectively, c alculated by discounting the debt's remaining contractual cash flows at estimated rates at which similar loans could have been obtained at December 31, 2022 and 2021. The estimate of the current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. These fair value calculations are considered to be Level 2 under the guidelines as set forth in ASC 820 as the Company utilizes market rates for similar type loans from third party brokers. For the years ended December 31, 2022, 2021, and 2020, interest was recorded as follows ($ in thousands):
| 2022 |  | 2021 |  | 2020
Total interest incurred | $ | 87,937 |  |  | $ | 73,284 |  |  | $ | 74,929 |
Interest capitalized | (15,400) |  |  | (6,257) |  |  | (14,324) |
Total interest expense | $ | 72,537 |  |  | $ | 67,027 |  |  | $ | 60,605 |
Debt Maturities Future principal payments due (including scheduled amortization payments and payments due upon maturity) on the Company's notes payable at December 31, 2022 are as follows ($ in thousands):
2023 | $ | 8,274 |
2024 | 429,087 |
2025 | 656,755 |
2026 | 220,125 |
2027 | 281,600 |
Thereafter | 746,000 |
| $ | 2,341,841 |

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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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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