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Indebtedness
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Indebtedness Indebtedness
The following tables contain summary information concerning our consolidated indebtedness as of December 31, 2022:
Debt:Outstanding PrincipalUnamortized Debt Issuance CostsUnamortized Loan (Discount)/PremiumsCarrying AmountType
Weighted
Average Rate (3)
Weighted
Average
Maturity
(in years)
Unsecured revolver (1)
$165,978 $(1,695)$— $164,283 Floating4.9%3.1
Unsecured term loans600,000 (3,388)— 596,612 Floating5.1%4.5
Secured credit
  facilities (2)
635,128 (2,256)27,670 660,542 Floating/Fixed4.3%5.9
Mortgages1,185,246 (7,305)32,267 1,210,208 Fixed3.9%5.2
Total Debt$2,586,352 $(14,644)$59,937 $2,631,645 4.5%5.1
(1)
The unsecured revolver total capacity is $500,000, of which $165,978 was outstanding as of December 31, 2022.
(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 $558,880 was outstanding as of December 31, 2022, respectively.
(3)
Represents the weighted average of the contractual interest rates in effect as of quarter-end without regard to any interest rate swaps or collars. Our total weighted average effective interest rate as of the year ended December 31, 2022, after giving effect to the impact of interest rate swaps and collars, and excluding the impact of loan premium amortization and discount accretion was 4.1%.
As of December 31, 2022 we were in compliance with all financial covenants contained in our consolidated indebtedness.
Original maturities on or before December 31,
Debt:20232024202520262027Thereafter
Unsecured revolver$— $— $— $165,978 $— $— 
Unsecured term loans— — — 200,000 — 400,000 
Secured credit facilities— — 3,525 10,493 11,462 609,648 
Mortgages 9,677 69,012 173,910 144,942 15,943 771,762 
Total$9,677 $69,012 $177,435 $521,413 $27,405 $1,781,410 
The following tables contains summary information concerning our consolidated indebtedness as of December 31, 2021:
Debt:Outstanding PrincipalUnamortized Debt Issuance CostsUnamortized Loan (Discount)/PremiumsCarrying AmountType
Weighted
Average Rate (3)
Weighted
Average
Maturity
(in years)
Unsecured revolver (1)
$277,003 $(2,894)$— $274,109 Floating1.5%4.1
Unsecured term loans500,000 (2,049)— 497,951 Floating1.4%3.2
Secured credit
  facilities (2)
635,128 (2,840)32,330 664,618 Floating/Fixed4.0%6.9
Mortgages 1,238,612 (9,210)39,256 1,268,658 Fixed3.9%6.1
Total Debt$2,650,743 $(16,993)$71,586 $2,705,336  3.2%5.6
(1)
The unsecured credit facility total capacity was $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.
(3)
Represents the weighted average of the contractual interest rates in effect as of quarter-end without regard to any interest rate swaps or collars. Our total weighted average effective interest rate as of the year ended December 31, 2021, after giving effect to the impact of interest rate swaps and collars, and excluding the impact of loan premium amortization and discount accretion was 2.9%.
Unsecured Credit Facility and Revolving Line of Credit
On July 25, 2022, we entered into the Fourth Amended, Restated and Consolidated Credit Agreement (the “Fourth Restated Credit Agreement”) which amended and restated in its entirety the Third Amended and Restated Credit Agreement dated as of December 14, 2021 (the “Third Restated Credit Agreement”). The Fourth Restated Credit Agreement provides for an aggregate amount available for borrowing of $1,100,000, which consists of (i) a $500,000 unsecured revolving credit facility with a January 31, 2026 scheduled maturity date (the “Revolving Credit Facility”), (ii) a $400,000 term loan with a January 28, 2028 maturity date (the “2028 Term Loan”); and (iii) a $200,000 term loan with a May 18, 2026 maturity date (the “2026 Term Loan”). The Fourth Restated Credit Agreement represents an increase of $100,000 over the Third Restated Credit Agreement which provided for (i) the Revolving Credit Facility, (ii) the 2026 Term Loan, and (iii) two additional term loans of $200,000 and $100,000, which had maturity dates of January 17, 2024 and November 20, 2024, respectively (collectively, the “2024 Term Loans”). Proceeds of the new 2028 Term Loan were used to (i) repay and retire the 2024 Term Loans, and (ii) reduce $100,000 of outstanding borrowings under the Revolving Credit Facility. In addition, the Fourth Restated Credit Agreement changed the LIBOR interest rate option to SOFR. The Fourth Restated Credit Agreement otherwise continues, without material change, the 2026 Term Loan and the Revolving
Credit Facility. We recognized the restructuring of the Fourth Restated Credit Agreement as a modification of debt for all lenders except for one and incurred deferred financing costs of $1,477 associated with the transaction. We recognized the portion of debt associated with the lender no longer participating in the Fourth Restated Credit Agreement as an extinguishment of debt and wrote off their de minimis deferred financing costs.
Borrowings under the 2028 Term Loan bear interest at a rate equal to either (i) the SOFR rate plus a margin of 115 to 180 basis points, or (ii) a base rate plus a margin of 15 to 80 basis points. These margins represent a 5-basis point decrease from those applicable to the term loans that were repaid and retired. The margin for borrowings under the Revolving Credit Facility and the 2026 Term Loan remained unchanged, with (1) Revolving Credit Facility borrowings bearing interest at a rate equal to either (i) the SOFR 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 (2) 2026 Term Loan borrowings bearing interest at a rate equal to either (i) the SOFR 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. At the time of closing, based on IROP’s consolidated leverage ratio, the applicable margin was 125 basis points for the Revolving Credit Facility, 120 basis points for the 2026 Term Loan and 115 basis points for the 2028 Term Loan.
IROP has the right to request an increase in the aggregate amount of the Fourth Restated Credit Agreement from $1,100,000 to up to $1,500,000, subject to certain terms and conditions, including receipt of commitments from one or more lenders, whether or not currently parties to the Fourth Restated Credit Agreement, to provide such increased amounts, which increase may be allocated, at IROP’s option, to the Revolving Credit Facility and/or to one or more of the Term Loans, in accordance with the Fourth Restated Credit Agreement.
On December 14, 2021, we entered into the Third Restated Credit Agreement which provided for a $1,000,000 unsecured credit facility (the “Facility”) that consisted 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 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. The Third Restated Credit Agreement was replaced by the Fourth Restated Credit Agreement as described above.
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 $350,000 unsecured credit facility that consisted 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 Fourth 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 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 July 25, 2022, we entered into the Fourth Restated Credit Agreement, discussed above, which amended and restated in its entirety the Third Restated Credit Agreement.
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, 2022, 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 table summarizes the mortgage payoffs during the years ended December 31, 2022 and 2021.
AmountWeighted Average Interest Rate
Mortgage payoffs in 2021
$305,804 3.81 %
Mortgage payoffs in 2022
46,046 3.60 %
$351,850 3.78 %
In connection with mortgage debt prepaid during the year-ended December 31, 2021, we incurred losses on extinguishment of debt totaling $10,261.