XML 27 R16.htm IDEA: XBRL DOCUMENT
v3.20.2

Debt | 6 Months Ended
--- | ---
Jun. 30, 2020
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 |
|  | June 30, |  |  | December 31, |  |  | Maturity Date at |  | June 30, |  |  | December 31, |
|  | 2020 |  |  | 2019 |  |  | June 30, 2020 |  | 2020 |  |  | 2019 |
Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core Fixed Rate |  | 3.88%-6.00% |  |  | 3.88%-6.00% |  |  | Feb 2024 - Apr 2035 |  | $ | 175,149 |  |  | $ | 176,176 |
Core Variable Rate - Swapped (a) |  | 3.41%-4.54% |  |  | 3.41%-4.54% |  |  | Jan 2023 - Nov 2028 |  |  | 81,035 |  |  |  | 81,559 |
Total Core Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  | 256,184 |  |  |  | 257,735 |
Fund II Fixed Rate (b) |  | 4.75% |  |  | 4.75% |  |  | May 2022 |  |  | 200,000 |  |  |  | 200,000 |
Fund II Variable Rate |  | LIBOR+3.00% |  |  | LIBOR+3.00% |  |  | March 2022 |  |  | 25,397 |  |  |  | 24,225 |
Fund II Variable Rate - Swapped (a) |  | 2.88% |  |  | 2.88% |  |  | Nov 2021 |  |  | 18,941 |  |  |  | 19,073 |
Total Fund II Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  | 244,338 |  |  |  | 243,298 |
Fund III Variable Rate |  | LIBOR+2.75%-LIBOR+3.10% |  |  | LIBOR+2.75%-LIBOR+3.10% |  |  | Jan 2021 - Jun 2021 |  |  | 75,722 |  |  |  | 74,554 |
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+3.40% |  |  | Sep 2020 - Aug 2021 |  |  | 180,855 |  |  |  | 157,015 |
Fund IV Variable Rate - Swapped (a) |  | 3.48%-4.61% |  |  | 3.48%-4.61% |  |  | Mar 2021 - Dec 2022 |  |  | 67,244 |  |  |  | 102,699 |
Total Fund IV Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  | 256,288 |  |  |  | 267,903 |
Fund V Variable Rate |  | LIBOR+1.50%-LIBOR+2.20% |  |  | LIBOR+1.50%-LIBOR+2.20% |  |  | Feb 2021 - Dec 2024 |  |  | 1,447 |  |  |  | 1,387 |
Fund V Variable Rate - Swapped (a) |  | 2.95%-4.78% |  |  | 2.95%-4.78% |  |  | Feb 2021 - Dec 2024 |  |  | 334,505 |  |  |  | 334,626 |
Total Fund V Mortgage Payable |  |  |  |  |  |  |  |  |  |  |  |  | 335,952 |  |  |  | 336,013 |
Net unamortized debt issuance costs |  |  |  |  |  |  |  |  |  |  |  |  | (7,506 | ) |  |  | (10,078 | )
Unamortized premium |  |  |  |  |  |  |  |  |  |  |  |  | 599 |  |  |  | 651 |
Total Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  | $ | 1,161,577 |  |  | $ | 1,170,076 |
Unsecured Notes Payable |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core Term Loans |  |  | — |  |  |  | — |  |  | Mar 2023 |  | $ | — |  |  | $ | — |
Core Variable Rate Unsecured Term Loans - Swapped (a) |  | 2.49%-5.02% |  |  | 2.49%-5.02% |  |  | Mar 2023 |  |  | 350,000 |  |  |  | 350,000 |
Total Core Unsecured Notes Payable |  |  |  |  |  |  |  |  |  |  |  |  | 350,000 |  |  |  | 350,000 |
Fund II Unsecured Notes Payable |  | LIBOR+1.65% |  |  | LIBOR+1.65% |  |  | Sep 2020 |  |  | 40,000 |  |  |  | 40,000 |
Fund IV Term Loan/Subscription Facility |  | LIBOR+1.65%-LIBOR+2.00% |  |  | LIBOR+1.65%-LIBOR+2.00% |  |  | Dec 2020 - June 2021 |  |  | 79,225 |  |  |  | 87,625 |
Fund V Subscription Facility |  | LIBOR+1.60% |  |  |  | — |  |  | May 2021 |  |  | 3,570 |  |  |  | — |
Net unamortized debt issuance costs |  |  |  |  |  |  |  |  |  |  |  |  | (288 | ) |  |  | (305 | )
Total Unsecured Notes Payable |  |  |  |  |  |  |  |  |  |  |  | $ | 472,507 |  |  | $ | 477,320 |
Unsecured Line of Credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core Unsecured Line of Credit -Swapped (a) |  | 2.49%-5.02% |  |  | 2.49%-5.02% |  |  | Mar 2022 |  | $ | 177,400 |  |  | $ | 60,800 |
Total Debt - Fixed Rate (c ) |  |  |  |  |  |  |  |  |  |  |  | $ | 1,412,465 |  |  | $ | 1,403,324 |
Total Debt - Variable Rate (b,d) |  |  |  |  |  |  |  |  |  |  |  |  | 406,214 |  |  |  | 314,604 |
Total Debt |  |  |  |  |  |  |  |  |  |  |  |  | 1,818,679 |  |  |  | 1,717,928 |
Net unamortized debt issuance costs |  |  |  |  |  |  |  |  |  |  |  |  | (7,794 | ) |  |  | (10,383 | )
Unamortized premium |  |  |  |  |  |  |  |  |  |  |  |  | 599 |  |  |  | 651 |
Total Indebtedness |  |  |  |  |  |  |  |  |  |  |  | $ | 1,811,484 |  |  | $ | 1,708,196 |
| (a) | At June 30, 2020, 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 $1,029.1 million and $948.8 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 $144.5 million and $143.3 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 + 1.40%, and a $350.0 million senior unsecured term loan (the “Term Loan”) which bears interest at LIBOR + 1.30%. 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 six months ended June 30, 2020, the Company:
| • | Extended the maturity dates of the Fund V Subscription line and five Fund mortgages, which had aggregate outstanding balances of $304.8 million at June 30, 2020;
| • | modified one Fund IV loan’s holdback terms in its $23.8 million mortgage, which has $18.9 million outstanding and drew an additional $1.0 million at closing;
| • | negotiated mortgage interest payment deferrals in relation to the COVID-19 Pandemic for three months on one Core loan and seven Fund loans aggregating $1.7 million;
| • | entered into two swap agreements each with notional values of $50.0 million, which are not effective until April 2022 and April 2023 (Note 8);
| • | repaid one Fund IV mortgage of $11.6 million in connection with the sale of Colonie Plaza (Note 2); and
| • | made scheduled principal payments of $2.7 million.
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% which was 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%.
At June 30, 2020 and December 31, 2019, the Company’s mortgages were collateralized by 43 and 44 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. The Company is not in default of its loan agreements, except as noted below. 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 June 30, 2020 and December 31, 2019. The loan was originated in June 2006 and had an original principal amount of $26.3 million and a scheduled maturity of July 1, 2016. By maturity, the loan was in default. The loan bears interest at a stated rate of approximately 6% 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 Court of Chancery, 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 original principal, accrued interest, default interest, late charges as well as fee s, costs and protective advances, under the Brandywine Loan, which the Successor Lender alleges totaled approximately $33.0 million as of November 9, 2017 (exclusive of accruing interest, default interest, late charges, and fees and costs). In August 2019, the Delaware Superior Court heard arguments on the parties’ cross-motions for summary judgment 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 under the Brandywine Loan and requesting the parties to contact the Court regarding a hearing of any additional outstanding issues. On June 24, 2020, the Successor Lender filed a motion to (i) amend the Note Complaint and Guaranty Complaint in order to increase the alleged balance under the Brandywine Loan to $46.8 million as of March 31, 2020, plus default interest of $0.3 million and additional attorneys’ fees of $0.2 million from April 1, 2020 to April 23, 2020, minus suspense funds of $1.5 million, and (ii) for entry of judgment in the foregoing amounts. Brandywine Holdings and the Operating Partnership opposed the motion. By Final Order and Judgment, entered July 27, 2020, the Delaware Superior Court denied the Successor Lender’s motion, and entered judgment against Brandywine Holdings and the Operating Partnership, jointly and severally, in the amount of $33.2 million, plus accruing interest and default interest in the total amount of $8,017 per diem from and after November 10, 2017 through the date of entry of judgment, less $1.3 million in “suspense funds” (consisting of unapplied property collections minus unapplied fees (including attorneys’ fees), costs, and protective advances made on Defendants’ behalf), together with post judgment interest, accruing after the entry of judgment, at the contract rate of interest agreed to by the parties. In connection with the Final Order and Judgment, d uring the three months ended June 30, 2020, the Company recorded an additional $6.8 million related primarily to legal and other costs of which the Company’s proportionate share was $1.5 million. 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 no further obligations, the Company recognized income of $5.0 million during the three months ended September 30, 2019, of which the Company’s proportionate share was $1.4 million, which is included in Other income in the consolidated statements of operations for the year ended December 31, 2019. Unsecured Notes Payable Unsecured notes payable for which total availability was $157.3 million and $152.5 million at June 30, 2020 and December 31, 2019, respectively, are comprised of the following:
| • | The outstanding balance of the Core term loans was $350.0 million at June 30, 2020 and December 31, 2019. The Company previously entered into swap agreements fixing the rates of the remaining 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 Operating Partnership. The outstanding balance of the Fund II term loan was $40.0 million at each of June 30, 2020 and December 31, 2019. There was no availability at each of June 30, 2020 and December 31, 2019.
| • | Fund IV has a $79.2 million bridge facility and a $15.0 million subscription line. The bridge facility is guaranteed by the Operating partnership up to $50.8 million. The outstanding balance and total available credit of the Fund IV bridge facility was $79.2 million and $0.0 million, respectively at each of June 30, 2020 and at December 31, 2019. The outstanding balance and total available credit of the Fund IV subscription line was $0.0 million and $10.9 million, respectively at June 30, 2020, reflecting letters of credit of $4.1 million. The outstanding balance and total availability at December 31, 2019 was $8.4 million and $2.5 million, respectively, reflecting letters of credit of $4.1 million.
| • | Fund V has a $150.0 million subscription line collateralized by Fund V’s unfunded capital commitments, and, to the extent of Acadia’s capital commitments, is guaranteed by the Operating Partnership. The outstanding balance and total available credit of the Fund V subscription line was $3.6 million and $146.4 million, respectively at June 30, 2020. The outstanding balance and total available credit of the Fund V subscription line was $0.0 million and $150.0 million at December 31, 2019, respectively.
On July 1, 2020, the Company obtained an additional $30.0 million term loan (Note 15). Unsecured Revolving Line of Credit The Company had a total of $62.1 million and $173.6 million available under its $250.0 million Core Revolver, reflecting borrowings of $177.4 million and $60.8 million and letters of credit of $10.5 million and $15.6 million at June 30, 2020 and December 31, 2019, respectively. At each of June 30, 2020 and December 31, 2019, all of the Core unsecured revolving line of credit was swapped to a fixed rate. Scheduled Debt Principal Payments The scheduled principal repayments, without regard to available extension options (described further below), of the Company’s consolidated indebtedness, as of June 30, 2020 are as follows (in thousands):
Year Ending December 31, |  |  |  |
2020 (Remainder) |  | $ | 144,831 |
2021 |  |  | 373,200 |
2022 |  |  | 475,218 |
2023 |  |  | 415,506 |
2024 |  |  | 212,015 |
Thereafter |  |  | 197,909 |
|  |  | 1,818,679 |
Unamortized premium |  |  | 599 |
Net unamortized debt issuance costs |  |  | (7,794 | )
Total indebtedness |  | $ | 1,811,484 |
The table above does not reflect available extension options (subject to customary conditions) on consolidated debt of $115.4 million contractually due in 2020, $231.4 million contractually due in 2021, $414.5 million contractually due in 2022 and $41.5 million contractually due in 2023; all for which the Company has available options to extend by up to 12 months and for some an additional 12 months thereafter. However, there can be no assurance that the Company will be able to successfully execute any or all of its available extension options. 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