v3.19.3.a.u2

Unsecured Credit Agreements | 12 Months Ended
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Dec. 31, 2019
Debt Disclosure [Abstract] |
Unsecured Credit Agreements | 9. Unsecured Credit Agreements 2019 Unsecured Term Loan Agreement On June 23, 2017, the Company amended and restated the term loan agreement by and among the Company, the OP, as the borrower, SunTrust Bank, as Administrative Agent, and the lenders party thereto (as amended and restated, the “2019 Unsecured Term Loan Agreement”). The 2019 Unsecured Term Loan Agreement amended certain terms, conditions, covenants, and other provisions to align them with those included in the Unsecured Revolving Credit and Term Loan Agreement described below, in addition to allowing a one-time, non-pro-rata $50,000 paydown on the loan (the “2019 Unsecured Term Loan”). On September 27, 2018, the Company made a $25,000 pro-rata paydown on the 2019 Unsecured Term Loan. The Company repaid the 2019 Unsecured Term Loan in full in February 2019. Borrowings under the 2019 Unsecured Term Loan bore interest at variable rates based on the one-month LIBOR plus a margin based on the OP’s investment grade credit rating ranging between 0.90% and 1.75%. Based on the OP’s credit rating of Baa3, the applicable margin under the 2019 Unsecured Term Loan was 1.40%. Unsecured Revolving Credit and Term Loan Agreement On June 23, 2017, the Corporation and the OP entered into an $800,000 unsecured revolving credit and term loan agreement (“Unsecured Revolving Credit and Term Loan Agreement”) with Manufacturers & Traders Trust Company (“M&T Bank”), as Administrative Agent, four participating banks as Joint Lead Arrangers and Joint Bookrunners, four participating banks as Co-Syndication Agents, and four participating banks, as Co-Documentation Agents. The Unsecured Revolving Credit and Term Loan Agreement consisted of a $400,000 senior unsecured revolving credit facility (“Revolving Credit Facility”), a $250,000 senior unsecured delayed draw term loan (“2023 Unsecured Term Loan”), and a $150,000 senior unsecured delayed draw term loan (“2024 Unsecured Term Loan”). The Unsecured Revolving Credit and Term Loan Agreement provides an accordion feature for up to a total of $1,000,000 of borrowing capacity. The Revolving Credit Facility includes a $35,000 sublimit for swingline loans and $20,000 available for issuance of letters of credit. On November 20, 2017, pursuant to the terms of a Consent and Agreement Regarding Commitment Increases and Additional Term Loans (the “Commitment Increase”) among the Company, the OP, as the borrower, M&T Bank, as Administrative Agent, and the original parties to the Unsecured Revolving Credit and Term Loan Agreement, plus U.S. Bank National Association and Raymond James, N.A. as new lenders added pursuant to the Commitment Increase, the OP obtained an additional $80,000 in credit commitments from the lenders, raising the total available borrowings under the Unsecured Revolving Credit and Term Loan Agreement to $880,000. Except as amended by the Commitment Increase, all terms and conditions of the Unsecured Revolving Credit and Term Loan Agreement remained the same as those in effect prior to the Commitment Increase. As amended by the Commitment Increase, the Unsecured Revolving Credit and Term Loan Agreement consisted of the $425,000 Revolving Credit Facility, the $265,000 2023 Unsecured Term Loan, and the $190,000 2024 Unsecured Term Loan. On February 28, 2019, the Company amended the Unsecured Revolving Credit and Term Loan Agreement to increase the amount available under the Revolving Credit Facility from $425,000 to $600,000. This increased the total available borrowings under the Unsecured Revolving Credit and Term Loan Agreement to $1,055,000. All other terms and conditions of the Unsecured Revolving Credit and Term Loan Agreement remained the same as those in effect prior to this amendment. The Revolving Credit Facility has an initial maturity date of January 21, 2022 and provides for one five-month extension, at the election of the Company, subject to certain conditions set forth in the agreement and payment of a 0.0625% fee on the revolving commitments. Borrowings on the Revolving Credit Facility bear interest at variable rates based on LIBOR plus a margin based on the OP’s credit rating ranging between 0.825% and 1.55% per annum. The Revolving Credit Facility contains an applicable facility fee based on the OP’s credit rating ranging between 0.13% and 0.30% per annum. Based on the OP’s current credit rating of Baa3, the applicable margin under the Revolving Credit Facility is 1.20%, and the applicable facility fee is 0.25%. Borrowings under the 2023 Unsecured Term Loan bear interest at variable rates based on LIBOR plus a margin based on the OP’s credit rating ranging between 0.90% and 1.75% per annum through the maturity date of January 2023. Based on the OP’s current credit rating of Baa3, the applicable margin under the 2023 Unsecured Term Loan is 1.35%. The 2024 Unsecured Term Loan provided for up to three delayed draws from inception through June 2018, at the request of the Company. The Company requested a draw for the remaining available borrowings under the 2024 Unsecured term loan in June 2018. On July 1, 2019, the Company amended the Unsecured Revolving Credit and Term Loan Agreement. Prior to the amendment, the borrowings under the 2024 Unsecured Term Loan were subject to interest at variable rates based on LIBOR plus a margin based on the OP’s credit rating ranging between 1.50% and 2.45% per annum with the applicable margin being 1.90% at December 31, 2018. The amendment reduced the margin to a range between 0.85% and 1.65% per annum and based on the OP’s current credit rating of Baa3, the applicable margin is 1.25% beginning on July 1, 2019. All other terms and conditions of the Unsecured Revolving Credit and Term Loan Agreement remained materially the same as those in effect prior to this amendment. The 2023 Unsecured Term Loan and 2024 Unsecured Term Loan were both subject to a fee of 0.25% per annum on the amount of the commitments, reduced by the amount of term loans outstanding under the applicable loan. The Company is subject to various financial and nonfinancial covenants under the Unsecured Revolving Credit and Term Loan Agreement. 2026 Unsecured Term Loan On February 27, 2019, the Company entered into a $450,000 seven-year unsecured term loan agreement (the “2026 Unsecured Term Loan”) with Capital One, National Association as administrative agent. The 2026 Unsecured Term Loan provides an accordion feature for up to a total of $550,000 borrowing capacity. The 2026 Unsecured Term Loan has an initial maturity date of February 27, 2026. Borrowings under the 2026 Unsecured Term Loan are subject to interest only payments at variable rates equal to LIBOR plus a margin between 1.45% and 2.40% per annum based on the OP’s credit rating. Based on the OP’s current credit rating of Baa3, the applicable margin under the 2026 Unsecured Term Loan is 1.85%. The 2026 Unsecured Term Loan is subject to a fee of 0.25% per annum on the amount of the commitment, reduced by the amount of term loans outstanding. At closing, $300,000 of the commitment was funded and used to repay the 2019 Unsecured Term Loan in full. The remaining $150,000 commitment was drawn on August 27, 2019 and used to partially fund acquisitions. 2020 Unsecured Term Loan On August 2, 2019, the Company entered into a $300,000 term loan agreement (the “2020 Unsecured Term Loan”), maturing on August 2, 2020, with JP Morgan Chase Bank, N.A. as administrative agent. The 2020 Unsecured Term Loan was subject to a fee of 0.25% per annum on the amount of the commitment, reduced by the amount of term loans outstanding. The entire amount of $300,000 was funded on August 28, 2019 and used to partially fund acquisitions. Borrowings under the 2020 Unsecured Term Loan are subject to interest-only payments at variable rates equal to LIBOR plus a margin based on the OP’s credit rating between 0.85% and 1.65% per annum. Based on the OP’s current credit rating of Baa3, the applicable margin is 1.25%. Senior Notes In January 2017, the Company commenced a private offering of unsecured, fixed-rate, interest-only senior promissory notes (the “Series A Notes”). On April 18, 2017, the Company closed the offering and issued the Series A Notes for an aggregate principal amount of $150,000. The Series A Notes were issued by the OP and guaranteed by the Corporation. The Series A Notes were issued at par, bear interest at a rate of 4.84% per annum (priced at 240 basis points above the 10-year U.S. Treasury yield at the time of pricing), and have a 10-year maturity, maturing on April 18, 2027. On July 2, 2018, the Company entered into a Note and Guaranty Agreement (the “NGA Agreement”) with each of the purchasers of unsecured, fixed-rate, interest-only, guaranteed senior promissory notes. Under the NGA Agreement, the OP issued and sold senior promissory notes in two series, Series B Guaranteed Senior Notes (the “Series B Notes”) and Series C Guaranteed Senior Notes (the “Series C Notes”), for an aggregate principal amount of $325,000. The Series B Notes provide for an aggregate principal amount of $225,000 with a fixed-rate of 5.09% through the maturity date of July 2, 2028. The Series C Notes provide for an aggregate principal amount of $100,000 with a fixed-rate of 5.19% through the maturity date of July 2, 2030. On July 2, 2018, the OP issued $100,000 of the Series B Notes and $50,000 of the Series C Notes. The remaining $125,000 principal of the Series B Notes and $50,000 principal of the Series C Notes were funded on September 13, 2018. The proceeds of both issuances were used to pay off borrowings on the Revolving Credit Facility, along with $25,000 of the outstanding principal on the 2019 Unsecured Term Loan. The following table summarizes the Company’s unsecured credit agreements:
|  | Outstanding Balance |  |  |  |  |  |  |
|  | December 31, |  |  | Interest |  |  | Maturity
(in thousands, except interest rates) |  | 2019 |  |  | 2018 |  |  | Rate(d) |  |  | Date
2019 Unsecured Term Loan(a) |  | $ | — |  |  | $ | 300,000 |  |  | one-month LIBOR + 1.40% |  |  | Feb. 2020(g)
2020 Unsecured Term Loan(a) |  |  | 300,000 |  |  |  | — |  |  | one-month LIBOR + 1.25% |  |  | Aug. 2020(h)
Unsecured Revolving Credit and Term Loan Agreement(a) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revolving Credit Facility(b) |  |  | 197,300 |  |  |  | 141,100 |  |  | one-month LIBOR + 1.20%(e) |  |  | Jan. 2022
2023 Unsecured Term Loan |  |  | 265,000 |  |  |  | 265,000 |  |  | one-month LIBOR + 1.35% |  |  | Jan. 2023
2024 Unsecured Term Loan |  |  | 190,000 |  |  |  | 190,000 |  |  | one-month LIBOR + 1.25%(f) |  |  | Jun. 2024
|  |  | 652,300 |  |  |  | 596,100 |  |  |  |  |  |  |
2026 Unsecured Term Loan(a) |  |  | 450,000 |  |  |  | — |  |  | one-month LIBOR + 1.85% |  |  | Feb. 2026
Senior Notes(a) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Series A |  |  | 150,000 |  |  |  | 150,000 |  |  | 4.84% |  |  | Apr. 2027
Series B |  |  | 225,000 |  |  |  | 225,000 |  |  | 5.09% |  |  | Jul. 2028
Series C |  |  | 100,000 |  |  |  | 100,000 |  |  | 5.19% |  |  | Jul. 2030
|  |  | 475,000 |  |  |  | 475,000 |  |  |  |  |  |  |
Total |  |  | 1,877,300 |  |  |  | 1,371,100 |  |  |  |  |  |  |
Debt issuance costs, net(c) |  |  | (7,919 | ) |  |  | (4,227 | ) |  |  |  |  |  |
|  | $ | 1,869,381 |  |  | $ | 1,366,873 |  |  |  |  |  |  |
(a) | The Company believes it was in compliance with all financial covenants for all periods presented.
(b) | At December 31, 2018, the Company had an outstanding balance of $15,000 on the swingline loan feature of the Revolving Credit Facility, due within five business days. On January 2, 2019, the balance became a part of the Revolving Credit Facility.
(c) | Amounts presented include debt issuance costs, net, related to the unsecured term notes and senior notes only.
(d) | At December 31, 2019 and 2018, one-month LIBOR was 1.76% and 2.35%, respectively.
(e) | At December 31, 2018, the swingline loan balance of $15,000 bore interest at 5.45% and the remaining Revolving Credit Facility balance of $126,100 bore interest at one-month LIBOR plus 1.20%.
(f) | On July 1, 2019 the Company amended the Unsecured Revolving Credit and Term Loan Agreement to reduce the variable rate margin from a range of 1.50% to 2.45% to a range of 0.85% to 1.65%. Prior to the amendment, at December 31, 2018, the applicable margin on the 2024 Unsecured Term Loan was 1.90%.
(g) | In January 2019 the Company exercised the first of two extension options, extending the maturity date of the loan from February 2019 to February 2020. The loan was subsequently repaid in full on February 27, 2019 in connection with entering into the 2026 Unsecured Term Loan.
(h) | The 2020 Unsecured Term Loan allows two six-month extensions, at the Company’s option, subject to payment of a fee equal to 0.05% of the outstanding principal balance at the time of extension.
At December 31, 2019 and 2018, the weighted average interest rate on all outstanding borrowings was 3.68% and 4.23%, respectively. For the year ended December 31, 2019, the Company paid $6,549 in debt issuance costs associated with the 2020 Unsecured Term Loan, the 2026 Unsecured Term Loan and the amended Unsecured Revolving Credit and Term Loan Agreement. For the year ended December 31, 2018, the Company paid $2,209 in debt issuance costs associated with the Series B Notes and Series C Notes. For the year ended December 31, 2017, the Company paid $8,711 in debt issuance costs associated with the Series A Notes, the Unsecured Revolving Credit and Term Loan Agreement, and the 2019 Unsecured Term Loan Agreement. For each separate debt instrument, on a lender by lender basis, in accordance with ASC 470-50, Debt Modifications and Extinguishment, the Company performed an assessment of whether the transaction was deemed to be new debt, a modification of existing debt, or an extinguishment of existing debt. Debt issuance costs are either deferred and amortized over the term of the associated debt or expensed as incurred. Based on this assessment, $6,543 of the debt issuance costs incurred during the year ended December 31, 2019, were deemed to be related to the issuance of new debt, or the modification of existing debt, and therefore have been deferred and are being amortized over the term of the associated debt. The remaining $6 of the debt issuance costs incurred during the year ended December 31, 2019, were deemed to be related to the extinguishment of debt and were expensed and included in Cost of debt extinguishment in the accompanying Consolidated Statements of Income and Comprehensive Income. Additionally, $328 of unamortized debt issuance costs were expensed during the year ended December 31, 2019, and included in Cost of debt extinguishment in the accompanying Consolidated Statements of Income and Comprehensive Income. All debt issuance costs incurred during the year ended December 31, 2018, related to the issuance of new debt and therefore have been deferred and are being amortized over the term of the associated debt. Of the total debt issuance costs incurred in 2017, $5,810 related to the issuance of new debt and therefore have been deferred and are being amortized over the term of the associated debt. The remaining $2,901 of debt issuance costs were associated with lenders whose commitments under the new agreements have been determined to be an extinguishment and such debt issuance costs were expensed as a component of the Cost of debt extinguishment in the accompanying Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2017. Additionally, $654 of unamortized debt issuances costs were expensed and included in Cost of debt extinguishment in the accompanying Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2017. Debt issuance costs are amortized as a component of interest expense in the accompanying Consolidated Statements of Income and Comprehensive Income. The following table summarizes debt issuance cost amortization related to the Unsecured revolving credit facility, Mortgages and notes payable, and Unsecured term notes:
|  | For the years ended December 31, |
(in thousands) |  | 2019 |  |  | 2018 |  |  | 2017 |
Debt issuance costs amortization |  | $ | 2,685 |  |  | $ | 1,918 |  |  | $ | 1,794 |

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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 + Details
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