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Indebtedness
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Indebtedness

NOTE 5: Indebtedness

The following tables contains summary information concerning our indebtedness as of December 31, 2021:

Debt:

 

Outstanding Principal

 

 

Unamortized Debt Issuance Costs

 

 

Loan (Discount)/Premiums

 

 

Carrying Amount

 

 

Type

 

Weighted

Average Rate

 

 

Weighted

Average

Maturity

(in years)

 

Unsecured Revolver (1)

 

$

277,003

 

 

$

(2,894

)

 

$

-

 

 

$

274,109

 

 

Floating

 

1.5%

 

 

 

4.1

 

Unsecured term loans

 

 

500,000

 

 

 

(2,049

)

 

 

-

 

 

 

497,951

 

 

Floating

 

1.4%

 

 

 

3.2

 

Secured Credit Facilities (2)

 

 

635,128

 

 

 

(2,840

)

 

 

32,330

 

 

 

664,618

 

 

Floating/Fixed

 

4.0%

 

 

 

6.9

 

Mortgages

 

 

1,238,612

 

 

 

(9,210

)

 

 

39,256

 

 

 

1,268,658

 

 

Fixed

 

3.9%

 

 

 

6.1

 

Total Debt

 

$

2,650,743

 

 

$

(16,993

)

 

$

71,586

 

 

$

2,705,336

 

 

 

 

3.2%

 

 

 

5.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The unsecured revolver total capacity is $500,000, of which $277,003 was outstanding as of December 31, 2021.  

 

(2)

The secured credit facilities include the PNC secured credit facility (“PNC MCFA”) and Newmark secured credit facility (“Newmark MCFA”) assumed in the STAR Merger, of which $76,248 and $558,880 was outstanding as of December 31, 2021, respectively.

 

As of December 31, 2021 we were in compliance with all financial covenants contained in our indebtedness.

 

 

 

Original maturities on or before December 31,

 

Debt:

 

2022

 

 

2023

 

 

2024

 

 

2025

 

 

2026

 

 

Thereafter

 

Unsecured credit facility

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

277,003

 

 

$

-

 

Unsecured term loans

 

 

-

 

 

 

-

 

 

 

300,000

 

 

 

-

 

 

 

200,000

 

 

 

-

 

Secured Credit Facilities (1)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,525

 

 

 

10,493

 

 

 

621,110

 

Mortgages

 

 

9,038

 

 

 

10,998

 

 

 

108,082

 

 

 

168,989

 

 

 

131,666

 

 

 

809,839

 

Total

 

$

9,038

 

 

$

10,998

 

 

$

408,082

 

 

$

172,514

 

 

$

619,162

 

 

$

1,430,949

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes the PNC MCFA and Newmark MCFA assumed in the STAR Merger.

 

The following tables contains summary information concerning our indebtedness as of December 31, 2020:

Debt:

 

Outstanding Principal

 

 

Unamortized Debt Issuance Costs

 

 

Carrying Amount

 

 

Type

 

Weighted

Average Rate

 

 

Weighted

Average

Maturity

(in years)

 

Unsecured credit facility (1)

 

$

184,802

 

 

$

(1,692

)

 

$

183,110

 

 

Floating

 

1.6%

 

 

 

2.4

 

Unsecured term loans

 

 

300,000

 

 

 

(1,241

)

 

 

298,759

 

 

Floating

 

1.5%

 

 

 

3.3

 

Mortgages

 

 

465,092

 

 

 

(1,275

)

 

 

463,817

 

 

Fixed

 

3.9%

 

 

 

3.2

 

Total Debt

 

$

949,894

 

 

$

(4,208

)

 

$

945,686

 

 

 

 

2.7%

 

 

 

3.1

 

 

(1)

The unsecured credit facility total capacity was $350,000, of which $184,802 was outstanding as of December 31, 2020.

 

Unsecured Credit Facility and Revolving Line of Credit

 

On December 14, 2021, we entered into a Third Amended, Restated and Consolidated Credit Agreement (the "Third Restated Credit Agreement") which provides for a $1,000,000 unsecured credit facility (the “Facility”) that consists of a $500,000 revolving line of credit (the “Unsecured Revolver”), a $200,000 senior term loan, a $200,000 term loan and a $100,000 term loan, (together, the “Unsecured Term Loans”), primarily to (1) increase the borrowing capacity under the Unsecured Revolver from $350,000 to $500,000, (2) extend the maturity date of the Unsecured Revolver from May 9, 2023 to January 31, 2026 and (3) consolidate the Unsecured Term Loans into one combined agreement. We have the right to increase the aggregate amount of the Third Restated Credit Agreement from $1,000,000 to $1,500,000, subject to certain terms and conditions. We may prepay the Third Restated Credit Agreement, in whole or in part, at any time without prepayment fee or penalty. Borrowings under the Unsecured Revolver bear interest at a rate equal to either (i) the LIBOR rate plus a margin of 125 to 200 basis points, or (ii) a base rate plus a margin of 25 to 100 basis points and borrowings under the Unsecured Term Loans bear interest at a rate equal to either (i) the LIBOR rate plus a margin of 120 to 190 basis points, or (ii) a base rate plus a margin of 20 to 90 basis points.  The applicable margin will be determined based upon IROP’s consolidated leverage ratio. The Unsecured Revolver requires monthly payments of interest only, but requires mandatory prepayments under certain circumstances, as set forth in the Third Restated Credit Agreement.  At the time of closing, based on IROP’s consolidated leverage ratio, the applicable margin was 125 basis points for the Unsecured Revolver and was 120 basis points for the Unsecured Term Loans. We recognized the restructuring of the Third Restated Credit Agreement as a modification of debt and incurred deferred financing costs of $1,886 associated with the transaction.

 

On May 18, 2021, we entered into a Second Amended and Restated Credit Agreement (the “Second Restated Credit Agreement”) which provided for a $550,000 unsecured credit facility that consisted of a $350,000 revolving line of credit and a new $200,000 senior term loan. We recognized the refinance of the revolving line of credit as a modification of debt. The senior term loan was accounted for as an issuance of new debt. We incurred upfront costs of $1,200 associated with this transaction. The Second Restated Credit Agreement was replaced by the Third Restated Credit Agreement.

 

On May 9, 2019, we entered into a new $350,000 unsecured credit facility that consists entirely of a revolving line of credit (the “Unsecured Credit Facility”), refinancing and terminating a previous unsecured credit facility. We recognized the refinance as a modification of our prior unsecured credit facility and incurred deferred financing costs of $1,129 associated with this transaction.  This unsecured credit facility was replaced by the Second Restated Credit Agreement.

        

In addition to certain negative covenants, the Third Restated Credit Agreement has financial covenants that require us to (i) maintain a consolidated leverage ratio below specified thresholds, (ii) maintain a minimum consolidated fixed charge coverage ratio, and (iii) maintain a minimum consolidated tangible net worth, (iv) and maintain secured and unsecured leverage ratios below specified thresholds. Additionally, the covenants (i) limit (a) the amount of distributions that IRT can make to a percentage of Funds from Operations (as such term is described in the debt agreement), (b) and the ratio of unencumbered asset adjusted net operating income to unsecured interest expense.

 

Term Loans

 

On December 14, 2021, we entered into the Third Restated Credit Agreement, discussed above, which consolidated the Unsecured Term Loans into the Third Restated Credit Agreement. There were no material changes to the terms of the Unsecured Term Loans, including aggregate amounts or maturity dates, in connection with their consolidation under the Third Restated Credit Agreement.

 

On October 30, 2018, we entered into an agreement for a one of the three Unsecured Term Loans, specifically the $200,000 unsecured term loan, which matures on January 17, 2024. We incurred upfront deferred costs of $821 associated with this term loan. The interest rate on this term loan is LIBOR plus a spread of 1.20% – 1.90% based on our consolidated leverage ratio. At closing, we drew $150,000 under the loan. The remaining $50,000 was drawn in February 2019. We applied proceeds of both draws to reduce outstanding borrowings under our Unsecured Credit Facility.

 

On November 20, 2017, we entered into an agreement for one of the three Unsecured Term Loans, specifically the $100,000 unsecured term loan, which matures on November 20, 2024. We incurred upfront deferred costs of $917 associated with this term loan. In November 2019, this loan was amended to reduce the interest spread. We incurred $257 of upfront deferred costs associated

with this amendment. The interest rate on this unsecured term loan is LIBOR plus a spread of 1.20% – 1.90% based on our consolidated leverage ratio.

 

   Secured Credit Facilities

 

          PNC Secured Credit Facility

 

         On December 16, 2021, in connection with the STAR Merger, we assumed the PNC MCFA, a fixed rate multifamily note and other loan documents for the benefit of PNC Bank. The PNC MCFA provided for a fixed rate loan in the aggregate principal amount of $79,170 that accrues interest at 2.82% per annum and has a maturity date of July 1, 2030. As of December 31, 2021, the outstanding principal balance was $76,248.

 

         Newmark Secured Credit Facility

 

          On December 16, 2021, in connection with the STAR Merger, we assumed the Newmark MCFA, which includes four tranches: (1) a fixed rate loan in the aggregate principal amount of $331,001 that accrues interest at 4.43% per annum; (2) a fixed rate loan in the aggregate principal amount of $137,917 that accrues interest at 4.57% per annum; (3) a variable rate loan in the aggregate principal amount of $49,493 that accrues interest at the one-month LIBOR plus 1.70% per annum; and (4) a fixed rate loan in the aggregate principal amount of $40,468 that accrues interest at 3.34% per annum. The first three tranches have a maturity date of August 1, 2028, and the fourth tranche has a maturity date of March 1, 2030, unless in each case the maturity date is accelerated in accordance with the terms of the loan documents. Interest only payments are payable monthly through August 1, 2025 and April 1, 2027 on the first three tranches and fourth tranche, respectively, with interest and principal payments due monthly thereafter.

 

Mortgages

 

The following tables summarizes the mortgage payoffs during the years ended December 31, 2021 and 2020.

 

Property

 

Date

 

Amount

 

 

Interest Rate

 

Millenia 700

 

7/9/2020

 

$

32,117

 

 

 

4.07

%

Crestmont

 

3/1/2021

 

 

5,975

 

 

 

5.70

%

Brier Creek

 

4/5/2021

 

 

13,629

 

 

 

4.20

%

Walnut Hill

 

7/1/2021

 

 

18,650

 

 

 

3.42

%

Kings Landing

 

7/28/2021

 

 

19,618

 

 

 

3.96

%

Lenox Place

 

7/30/2021

 

 

15,991

 

 

 

3.73

%

Stonebridge Crossing

 

10/1/2021

 

 

19,370

 

 

 

3.41

%

Aston

 

11/30/2021

 

 

24,141

 

 

 

3.40

%

Runaway Bay

 

11/30/2021

 

 

8,542

 

 

 

3.59

%

Avenues at Craig Ranch

 

11/30/2021

 

 

29,765

 

 

 

3.28

%

Creekside Corners Apartments

 

12/16/2021

 

 

22,437

 

 

 

4.56

%

Jamestown at St. Matthews

 

12/16/2021

 

 

22,098

 

 

 

3.59

%

Oxmoor Apartments

 

12/16/2021

 

 

34,591

 

 

 

3.59

%

Creekstone at RTP

 

12/17/2021

 

 

20,779

 

 

 

3.88

%

Fountains Southend

 

12/17/2021

 

 

19,884

 

 

 

4.31

%

Talison Row at Daniel Island

 

12/17/2021

 

 

30,334

 

 

 

4.06

%

 

 

 

 

$

337,921

 

 

 

3.83

%

 

 

 

 

 

Amount

 

 

Weighted Average Interest Rate

 

Mortgage payoffs in 2020

 

 

 

$

32,117

 

 

 

4.07

%

Mortgage payoffs in 2021

 

 

 

 

305,804

 

 

 

3.81

%

 

 

 

 

$

337,921

 

 

 

3.83

%

 

In connections with mortgage debt prepaid during November and December 2021, we incurred losses on extinguishment of debt totaling $10,261.