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Mortgages and Notes Payable
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Mortgages and Notes Payable Mortgages and Notes Payable
Our mortgages and notes payable consisted of the following:
December 31,
20222021
Secured indebtedness (1):
4.27% (3.61% effective rate) mortgage loan due 2028 (2)
$113,105 $115,731 
4.00% mortgage loan due 202989,204 91,318 
3.61% (3.19% effective rate) mortgage loan due 2029 (3)
84,666 84,973 
3.40% (3.50% effective rate) mortgage loan due 2033 (4)
69,473 69,422 
4.60% (3.73% effective rate) mortgage loan due 2037 (5)
127,540 130,498 
483,988 491,942 
Unsecured indebtedness:
3.625% (3.752% effective rate) notes due 2023 (6)
— 249,726 
3.875% (4.038% effective rate) notes due 2027 (7)
298,334 297,934 
4.125% (4.271% effective rate) notes due 2028 (8)
347,863 347,449 
4.200% (4.234% effective rate) notes due 2029 (9)
349,386 349,288 
3.050% (3.079% effective rate) notes due 2030 (10)
399,302 399,204 
2.600% (2.645% effective rate) notes due 2031 (11)
398,735 398,579 
Variable rate term loan due 2026 (12)
200,000 200,000 
Variable rate term loan due 2027 (12)
150,000 — 
Variable rate term loan due 2024 (12)
200,000 — 
Revolving credit facility due 2025 (13)
386,000 70,000 
2,729,620 2,312,180 
Less-unamortized debt issuance costs(16,393)(15,207)
Total mortgages and notes payable, net$3,197,215 $2,788,915 
__________
(1)Our secured mortgage loans were collateralized by real estate assets with an undepreciated book value of $747.4 million as of December 31, 2022. We paid down $6.4 million of secured loan balances through principal amortization during 2022.
(2)Net of unamortized fair market value premium of $3.3 million and $3.9 million as of December 31, 2022 and 2021, respectively.
(3)Net of unamortized fair market value premium of $2.0 million and $2.3 million as of December 31, 2022 and 2021, respectively.
(4)Net of unamortized fair market value discount of $0.5 million and $0.6 million as of December 31, 2022 and 2021, respectively.
(5)Net of unamortized fair market value premium of $9.3 million and $10.0 million as of December 31, 2022 and 2021, respectively.
(6)Net of unamortized original issuance discount of $0.3 million as of December 31, 2021. This debt was repaid in 2022.
(7)Net of unamortized original issuance discount of $1.7 million and $2.1 million as of December 31, 2022 and 2021, respectively.
(8)Net of unamortized original issuance discount of $2.1 million and $2.6 million as of December 31, 2022 and 2021, respectively.
(9)Net of unamortized original issuance discount of $0.6 million and $0.7 million as of December 31, 2022 and 2021, respectively.
(10)Net of unamortized original issuance discount of $0.7 million and $0.8 million as of December 31, 2022 and 2021, respectively.
(11)Net of unamortized original issuance discount of $1.3 million and $1.4 million as of December 31, 2022 and 2021, respectively.
(12)The interest rate was 5.34% as of December 31, 2022.
(13)The interest rate was 5.24% as of December 31, 2022.

The following table sets forth scheduled future principal payments, including amortization, due on our mortgages and notes payable as of December 31, 2022:
Years Ending December 31,Amount
2023$7,069 
2024207,365 
2025393,176 
2026206,911 
2027458,929 
Thereafter1,940,158 
Less-unamortized debt issuance costs(16,393)
$3,197,215 

Our $750.0 million unsecured revolving credit facility is scheduled to mature in March 2025 and includes an accordion feature that currently allows for an additional $200.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for two additional six-month periods. During the second quarter of 2022, in connection with the modification of our $200.0 million term loan as discussed below, the interest rate on our revolving credit facility was converted from LIBOR plus 90 basis points to SOFR plus a related spread adjustment of 10 basis points and a borrowing spread of 85 basis points, based on current credit ratings. The annual facility fee is 20 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody’s Investors Service or Standard & Poor’s Ratings Services. We may be entitled to a temporary reduction in the interest rate of one basis point provided we meet certain sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. There was $386.0 million and $392.0 million outstanding under our new revolving credit facility as of December 31, 2022 and January 27, 2023, respectively. As of both December 31, 2022 and January 27, 2023, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility as of December 31, 2022 and January 27, 2023 was $363.9 million and $357.9 million, respectively.

During 2022, we obtained a $200.0 million, two-year unsecured bank term loan that is scheduled to mature in October 2024. Assuming no defaults have occurred, we have an option to extend the maturity for one additional year. The interest rate, based on current credit ratings, is SOFR plus a related spread adjustment of 10 basis points and a borrowing spread of 95 basis points. The interest rate is based on the higher of the publicly announced ratings from Moody’s Investors Service or Standard & Poor’s Ratings Services. We may be entitled to a temporary reduction in the interest rate of one basis point provided we meet certain sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. Additionally, we used the additional $200.0 million of borrowings, together with available cash and borrowings under our revolving credit facility, to prepay without penalty $250.0 million principal amount of 3.625% unsecured notes that were scheduled to mature in January 2023.

During 2022, we modified our $200.0 million unsecured bank term loan to extend the maturity date from November 2022 to May 2026. As part of this modification, we also obtained a $150.0 million delayed-draw term loan, which was drawn in its entirety in the third quarter of 2022, that is scheduled to mature in May 2027. The interest rate, based on current credit ratings, is SOFR plus a related spread adjustment of 10 basis points and a borrowing spread of 95 basis points. The interest rate is based on the higher of the publicly announced ratings from Moody’s Investors Service or Standard & Poor’s Ratings Services. We may be entitled to a temporary reduction in the interest rate of one basis point provided we meet certain sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. We incurred $2.7 million of debt issuance costs, which are being amortized along with certain existing unamortized debt issuance costs over the remaining term of our modified term loan.

During 2021, in conjunction with the acquisition of real estate assets from PAC, we assumed four secured mortgage loans recorded at fair value of $403 million in the aggregate, with a weighted average effective interest rate of 3.54% and a weighted average maturity of 10.7 years. We incurred $3.5 million of debt issuance costs related to these assumptions, which will be amortized over the remaining terms of the loans.
During 2021, we also obtained a $200.0 million, six-month unsecured bridge facility. The bridge facility was originally scheduled to mature in January 2022. The bridge facility bore interest at LIBOR plus 85 basis points, had a commitment fee of 20 basis points. We incurred $1.0 million of debt issuance costs related to this bridge facility which were being amortized over the six-month term. This bridge facility was prepaid in full without penalty prior to December 31, 2021. We recorded $0.2 million of loss on debt extinguishment related to this prepayment.

During 2021, we prepaid without penalty the remaining $150.0 million principal amount of 3.20% unsecured notes that was scheduled to mature in June 2021. We recorded $0.1 million of loss on debt extinguishment related to this prepayment.

During 2020, the Operating Partnership issued $400.0 million aggregate principal amount of 2.600% notes due February 2031, less original issuance discount of $1.6 million. These notes were priced to yield 2.645%. Underwriting fees and other expenses were incurred that aggregated $3.4 million; these costs were deferred and will be amortized over the term of the notes. The net proceeds from the issuance were used: (1) to finance the Operating Partnership’s cash tender offer to purchase $150.0 million principal amount of its 3.20% notes due June 15, 2021 at a purchase price of 101.908% of the face amount of the notes, plus accrued and unpaid interest; (2) to prepay without penalty our $100.0 million unsecured bank term loan that was scheduled to mature in January 2022 and which bore interest at LIBOR plus 110 basis points; and (3) for general corporate purposes. We recorded $3.7 million of aggregate losses on debt extinguishment related to the repurchase of the 3.20% notes and the term loan prepayment.

We previously entered into floating-to-fixed interest rate swaps through January 2022 with respect to an aggregate of $50.0 million LIBOR-based borrowings. These swaps effectively fixed the underlying one-month LIBOR rate at a weighted average rate of 1.693%. During 2022, these interest rate swaps expired.

We are currently in compliance with financial covenants with respect to our consolidated debt.

Our revolving credit facility and bank term loans require us to comply with customary operating covenants and various financial requirements. Upon an event of default on the revolving credit facility, the lenders having at least 51.0% of the total commitments under the revolving credit facility can accelerate all borrowings then outstanding, and we could be prohibited from borrowing any further amounts under our revolving credit facility, which would adversely affect our ability to fund our operations. In addition, certain of our unsecured debt agreements contain cross-default provisions giving the unsecured lenders the right to declare a default if we are in default under more than $35.0 million with respect to other loans in some circumstances.

The Operating Partnership has $298.3 million carrying amount of 2027 notes outstanding, $347.9 million carrying amount of 2028 notes outstanding, $349.4 million carrying amount of 2029 notes outstanding, $399.3 million carrying amount of 2030 notes outstanding and $398.7 million carrying amount of 2031 notes outstanding. The indenture that governs these outstanding notes requires us to comply with customary operating covenants and various financial ratios. The trustee or the holders of at least 25.0% in principal amount of any series of notes can accelerate the principal amount of such series upon written notice of a default that remains uncured after 60 days.

We have considered our short-term liquidity needs within one year from February 7, 2023 (the date of issuance of the annual financial statements) and the adequacy of our estimated cash flows from operating activities and other available financing sources to meet these needs. In particular, we have considered our scheduled debt maturities during such one-year period. We have concluded it is probable we will meet these short-term liquidity requirements through a combination of the following:

•available cash and cash equivalents;

•cash flows from operating activities;

•issuance of debt securities by the Operating Partnership;

•issuance of secured debt;

•bank term loans;

•borrowings under our revolving credit facility;

•issuance of equity securities by the Company or the Operating Partnership; and
•the disposition of non-core assets.

Capitalized Interest

Total interest capitalized to wholly-owned and joint venture development and significant building and tenant improvement projects was $4.0 million, $9.6 million and $8.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.