XML 23 R17.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Debt | 12 Months Ended
--- | ---
Dec. 31, 2019
Debt Disclosure [Abstract] |
Debt | 7. Debt A summary of the Company’s consolidated indebtedness is as follows (dollars in thousands):
|  | Interest Rate at |  |  |  |  | Carrying Value at |
|  | December 31, |  |  | December 31, |  |  | Maturity Date at |  | December 31, |  |  | December 31, |
|  | 2019 |  |  | 2018 |  |  | December 31, 2019 |  | 2019 |  |  | 2018 |
Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core Fixed Rate |  | 3.88%-6.00% |  |  | 3.88%-6.00% |  |  | Feb 2024 - Apr 2035 |  | $ | 176,176 |  |  | $ | 178,271 |
Core Variable Rate - Swapped (a) |  | 3.41%-4.54% |  |  | 3.41%-5.67% |  |  | Jan 2023 - Nov 2028 |  |  | 81,559 |  |  |  | 82,583 |
Total Core Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  | 257,735 |  |  |  | 260,854 |
Fund II Fixed Rate |  | 4.75% |  |  | 1.00%-4.75% |  |  | May 2020 |  |  | 200,000 |  |  |  | 205,262 |
Fund II Variable Rate |  | LIBOR+3.00% |  |  |  | — |  |  | March 2022 |  |  | 24,225 |  |  |  | — |
Fund II Variable Rate - Swapped (a) |  | 2.88% |  |  | 4.27% |  |  | Nov 2021 |  |  | 19,073 |  |  |  | 19,325 |
Total Fund II Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  | 243,298 |  |  |  | 224,587 |
Fund III Variable Rate |  | LIBOR+2.75%-LIBOR+3.10% |  |  | Prime+0.50%-LIBOR+4.65% |  |  | Jun 2020 - Jan 2021 |  |  | 74,554 |  |  |  | 90,096 |
Fund IV Fixed Rate |  | 3.40%-4.50% |  |  | 3.40%-4.50% |  |  | Oct 2025 - Jun 2026 |  |  | 8,189 |  |  |  | 8,189 |
Fund IV Variable Rate |  | LIBOR+1.60%-LIBOR+3.40% |  |  | LIBOR+1.60%-LIBOR+3.95% |  |  | Feb 2020 - Aug 2021 |  |  | 157,015 |  |  |  | 233,065 |
Fund IV Variable Rate - Swapped (a) |  | 3.48%-4.61% |  |  | 3.67%-4.23% |  |  | Mar 2020 - Dec 2022 |  |  | 102,699 |  |  |  | 71,841 |
Total Fund IV Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  | 267,903 |  |  |  | 313,095 |
Fund V Variable Rate |  | LIBOR+1.50%-LIBOR+2.20% |  |  | LIBOR+2.25% |  |  | Feb 2021 - Dec 2024 |  |  | 1,387 |  |  |  | 51,506 |
Fund V Variable Rate - Swapped (a) |  | 2.95%-4.78% |  |  | 4.61%-4.78% |  |  | Feb 2021 - Dec 2024 |  |  | 334,626 |  |  |  | 86,570 |
Total Fund V Mortgage Payable |  |  |  |  |  |  |  |  |  |  |  |  | 336,013 |  |  |  | 138,076 |
Net unamortized debt issuance costs |  |  |  |  |  |  |  |  |  |  |  |  | (10,078 | ) |  |  | (10,173 | )
Unamortized premium |  |  |  |  |  |  |  |  |  |  |  |  | 651 |  |  |  | 753 |
Total Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  | $ | 1,170,076 |  |  | $ | 1,017,288 |
Unsecured Notes Payable |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core Term Loans |  |  | — |  |  | LIBOR+1.25% |  |  | Mar 2023 |  | $ | — |  |  | $ | 383 |
Core Variable Rate Unsecured Term Loans - Swapped (a) |  | 2.49%-5.02% |  |  | 2.54%-3.59% |  |  | Mar 2023 |  |  | 350,000 |  |  |  | 349,617 |
Total Core Unsecured Notes Payable |  |  |  |  |  |  |  |  |  |  |  |  | 350,000 |  |  |  | 350,000 |
Fund II Unsecured Notes Payable |  | LIBOR+1.65% |  |  | LIBOR+1.40% |  |  | Sep 2020 |  |  | 40,000 |  |  |  | 40,000 |
Fund IV Term Loan/Subscription Facility |  | LIBOR+1.65%-LIBOR+2.00% |  |  | LIBOR+1.65%-LIBOR+2.75% |  |  | Dec 2020 - June 2021 |  |  | 87,625 |  |  |  | 40,825 |
Fund V Subscription Facility |  |  | — |  |  | LIBOR+1.60% |  |  | May 2020 |  |  | — |  |  |  | 102,800 |
Net unamortized debt issuance costs |  |  |  |  |  |  |  |  |  |  |  |  | (305 | ) |  |  | (368 | )
Total Unsecured Notes Payable |  |  |  |  |  |  |  |  |  |  |  | $ | 477,320 |  |  | $ | 533,257 |
Unsecured Line of Credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core Unsecured Line of Credit -Swapped (a) |  | 2.49%-5.02% |  |  |  | — |  |  | Mar 2022 |  | $ | 60,800 |  |  | $ | — |
Total Debt - Fixed Rate (b)(c) |  |  |  |  |  |  |  |  |  |  |  | $ | 1,403,324 |  |  | $ | 1,001,658 |
Total Debt - Variable Rate (d) |  |  |  |  |  |  |  |  |  |  |  |  | 314,604 |  |  |  | 558,675 |
Total Debt |  |  |  |  |  |  |  |  |  |  |  |  | 1,717,928 |  |  |  | 1,560,333 |
Net unamortized debt issuance costs |  |  |  |  |  |  |  |  |  |  |  |  | (10,383 | ) |  |  | (10,541 | )
Unamortized premium |  |  |  |  |  |  |  |  |  |  |  |  | 651 |  |  |  | 753 |
Total Indebtedness |  |  |  |  |  |  |  |  |  |  |  | $ | 1,708,196 |  |  | $ | 1,550,545 |
(a) | At December 31, 2019, the stated rates ranged from LIBOR + 1.50% to LIBOR +1.90% for Core variable-rate debt; LIBOR + 1.39% for Fund II variable-rate debt; LIBOR + 2.75% to LIBOR + 3.10% for Fund III variable-rate debt; LIBOR + 1.75% to LIBOR +2.25%for Fund IV variable-rate debt; LIBOR + 1.50% to LIBOR + 2.20% for Fund V variable-rate debt; LIBOR + 1.25% for Core variable-rate unsecured term loans; and LIBOR + 1.35% for Core variable-rate unsecured lines of credit.
(b) | Includes $948.8 million and $609.9 million, respectively, of variable-rate debt that has been fixed with interest rate swap agreements as of the periods presented.
(c) | Fixed-rate debt at December 31, 2019 includes $70.2 million of Core swaps that may be used to hedge debt instruments of the Funds.
(d) | Includes $143.3 million and $143.8 million, respectively, of variable-rate debt that is subject to interest cap agreements.
Credit Facility On February 20, 2018, the Company entered into a $500.0 million senior unsecured credit facility (the “Credit Facility”), comprised of a $150.0 million senior unsecured revolving credit facility (the “Revolver”) which bears interest at LIBOR + 1.35% (inclusive of a 20 basis-point facility fee), and a $350.0 million senior unsecured term loan (the “Term Loan”) which bears interest at LIBOR + 1.25%. On October 8, 2019, the Company modified the Credit Facility, which provided for a $100.0 million increase in the Revolver. This amendment resulted in borrowing capacity of up to $600.0 million in principal amount, which includes a $250.0 million revolving credit facility maturing on March 31, 2022, subject to an extension option, and a $350.0 million Term Loan expiring on March 31, 2023. In addition, the amendment provides for revisions to the accordion feature, which allows for one or more increases in the revolving credit facility or term loan facility, for a maximum aggregate principal amount not to exceed $750.0 million. Mortgages Payable During the year ended December 31, 2019, the Company:
| • | obtained one new Fund II construction loan, three new Fund IV mortgages and five new Fund V mortgages totaling $258.9 million with a weighted-average interest rate of LIBOR + 1.70% collateralized by nine properties and maturing in 2022 through 2024;
| • | refinanced three mortgages with existing balances totaling $69.0 million at a weighted-average rate of LIBOR + 2.08% and maturities ranging from May 2019 to January 2021 with new mortgages totaling $71.8 million with a weighted-average rate of LIBOR + 1.86% and maturities ranging from April 2022 through December 2024;
| • | transferred a Fund III mortgage with a balance of $4.7 million and an interest rate of Prime + 0.5% and assumed by the purchasing venture in a property sale (Note 2). The Company repaid one Fund III loan in the amount of $9.8 million and two Fund IV loans in the aggregate amount of $18.4 million in connection with the sale of the properties. The Company also repaid a Fund IV loan in full, which had a balance of $38.2 million and an interest rate of LIBOR + 2.35%. The Company also made scheduled principal payments of $5.9 million;
| • | modified three loans with prior borrowing capacity totaling $135.9 million at a weighted-average rate of LIBOR + 3.65% and maturities ranging from November 2019 through January 2020 by obtaining new commitments totaling $125.3 million with a weighted-average rate of LIBOR + 2.96% and maturities ranging from December 2020 through May 2021; and
| • | Entered into interest rate swap contracts to effectively fix the variable portion of the interest rates of all nine new obligations and two of the refinanced obligations with a notional value of $283.6 million at a weighted-average interest rate of 1.78%.
During the year ended December 31, 2018, the Company obtained four new Fund V mortgages totaling $109.5 million with a weighted-average interest rate of LIBOR + 1.99% collateralized by four properties and maturing in 2021. In addition, the Company obtained a $73.5 million Core mortgage with an interest rate of LIBOR + 1.50% collateralized by one property and maturing in 2028. As of December 31, 2018, the Company had drawn $50.0 million on this loan. The Company entered into interest rate swap contracts to effectively fix the variable portion of the interest rates of four of these obligations with a notional value of $136.6 million at an interest rate of 2.86%. In addition, the Company drew down $24.6 million on a Fund III construction loan. Also during 2018, the Company repaid one Core mortgage in full, which had a balance of $40.4 million and an interest rate of LIBOR + 1.65%, and three Fund IV mortgages in full, totaling $27.2 million with a weighted-average interest rate of LIBOR + 2.81%. The Company also made scheduled principal payments of $6.7 million during the year. At December 31, 2019 and 2018, the Company’s mortgages were collateralized by 44 and 43 properties, respectively, and the related tenant leases. Certain loans are cross-collateralized and contain cross-default provisions. The loan agreements contain customary representations, covenants and events of default. Certain loan agreements require the Company to comply with affirmative and negative covenants, including the maintenance of debt service coverage and leverage ratios. A portion of the Company’s variable-rate mortgage debt has been effectively fixed through certain cash flow hedge transactions (Note 8). The mortgage loan collateralized by the property held by Brandywine Holdings in the Core Portfolio, was in default and subject to litigation at December 31, 2019 and 2018. This loan was originated in June 2006 and had an original principal amount of $26.3 million and a scheduled maturity of July 1, 2016. The loan bears interest at a stated rate of approximately 6.00% and is subject to additional default interest of 5%. In April 2017, the successor to the original lender, Wilmington – 5190 Brandywine Parkway, LLC (the “Successor Lender”), initiated lawsuits against Brandywine Holdings in Delaware Superior Court and Delaware Chancery Court for, among other things, judgment on the note (the “Note Complaint”) and foreclosure on the property. In a contemporaneously filed action in Delaware Superior Court (the “Guaranty Complaint”), the Successor Lender initiated a lawsuit against the Operating Partnership as guarantor of certain guaranteed obligations of Brandywine Holdings set forth in a non-recourse carve-out guaranty executed by the Operating Partnership. The Guaranty Complaint alleges that the Operating Partnership is liable for the full balance of the principal, accrued interest, default interest, as well as fees and costs, under the Brandywine Loan, which the Successor Lender alleges totaled approximately $33.0 million as of November 9, 2017 (exclusive of accru ing interest, default interest, and fees and costs). In August 2019, the Delaware Superior Court heard arguments on the parties’ cross-motions for summary judgement regarding both the Guaranty Complaint and the Note Complaint. On February 7, 2020, the Delaware Superior Court granted in part the Successor Lender’s motion, and denied Brandywine Holdings’ and the Operating Partnership’s cross-motion, for summary judgment, finding that each of Brandywine Holdings and the Operating Partnership have recourse liability for the outstanding balance of the Brandywine Loan. The Delaware Superior Court’s decision will be appealable when a judgement is formally entered. Brandywine Holdings and the Operating Partnership intend to appeal the ruling as soon as it becomes appealable and to vigorously contest it. During the third quarter of 2019, the company recognized income of $5.0 million related to Fund II’s New Market Tax Credit transaction (“NMTC”) involving its City Point project. NMTCs were created to encourage economic development in low income communities and provided for a 39% tax credit on certain qualifying invested equity/loans. In 2012, the NMTCs were transferred to a group of investors (“Investors”) in exchange for $5.2 million. The NMTCs were subject to recapture under various circumstances, including redemption of the loan/investment prior to a requisite seven-year hold period, and recognition of income was deferred. Upon the expiration of the seven-year period and there being no further obligations, the Company recognized the income of $5.0 million, of which the Company’s proportionate share was $1.4 million, which is included in Other income in the consolidated statements of income. Unsecured Notes Payable Unsecured notes payable for which total availability was $152.5 million and $54.8 million at December 31, 2019 and 2018, respectively, are comprised of the following:
| • | The outstanding balance of the Core term loan was $350.0 million at each of December 31, 2019 and 2018. During the year ended December 31, 2019, the Company entered into interest rate swap contracts to effectively fix the variable portion of the interest rate with a notional value of $156.0 million at a weighted-average interest rate of 2.43%, which may be used to swap the Company’s unhedged, unsecured, LIBOR-based variable-rate debt. The Company previously entered into swap agreements fixing the rate of the Core term loan balance.
| • | Fund II has a $40.0 million term loan secured by the real estate assets of City Point Phase II and guaranteed by the Company and the Operating Partnership. The outstanding balance of the Fund II term loan was $40.0 million at each of December 31, 2019 and 2018. Total availability was $0.0 at each of December 31, 2019 and 2018.
| • | At Fund IV there are a $79.2 million bridge facility and a $15.0 million subscription line which were modified from their previous limits of $40.8 million and $27.0 million, respectively, during 2019. The outstanding balance of the Fund IV bridge facility was $79.2 million and $40.8 million at December 31, 2019 and 2018, respectively. Total availability was $0.0 million at each of December 31, 2019 and 2018. The outstanding balance of the Fund IV subscription line was $8.4 million and $0.0 million at December 31, 2019 and 2018, respectively. Total available credit was $2.5 million and $7.6 million at December 31, 2019 and 2018, reflecting letters of credit of $4.1 million and $7.4 million, respectively.
| • | Fund V has a $150.0 million subscription line collateralized by Fund V’s unfunded capital commitments and guaranteed in part by the Operating Partnership. The outstanding balance and total available credit of the Fund V subscription line was $0.0 million and $150.0 million, respectively at December 31, 2019. The outstanding balance and total available credit of the Fund V subscription line was $102.8 million and $47.2 million, respectively at December 31, 2018.
Unsecured Revolving Line of Credit The Company had a total of $173.6 million and $137.7 million, respectively, available under its $250.0 million Core Revolver, which was formerly a $150.0 million Revolver as previously discussed, reflecting borrowings of $60.8 and $0.0 million and letters of credit of $15.6 million and $12.3 million at December 31, 2019 and 2018. At each of December 31, 2019 and 2018, all of the Core unsecured revolving line of credit was swapped to a fixed rate. Scheduled Debt Principal Payments The scheduled principal repayments of the Company’s consolidated indebtedness, as of December 31, 2019 are as follows (in thousands):
Year Ending December 31, |  |  |  |
2020 |  | $ | 437,329 |
2021 |  |  | 287,723 |
2022 |  |  | 167,514 |
2023 |  |  | 415,476 |
2024 |  |  | 211,991 |
Thereafter |  |  | 197,895 |
|  |  | 1,717,928 |
Unamortized premium |  |  | 651 |
Net unamortized debt issuance costs |  |  | (10,383 | )
Total indebtedness |  | $ | 1,708,196 |
See Note 4 for information about liabilities of the Company’s unconsolidated affiliates.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration