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Debt | 12 Months Ended
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Dec. 31, 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 |
|  | December 31, |  |  | December 31, |  |  | Maturity Date at |  | December 31, |  |  |  |  | December 31, |
|  | 2020 |  |  | 2019 |  |  | December 31, 2020 |  | 2020 |  |  |  |  | 2019 |
Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core Fixed Rate |  | 3.88%-5.89% |  |  | 3.88%-6.00% |  |  | Feb 2024 - Apr 2035 |  | $ | 147,810 |  |  |  |  | $ | 176,176 |
Core Variable Rate - Swapped (a) |  | 3.41%-4.54% |  |  | 3.41%-4.54% |  |  | Jan 2023 - Nov 2028 |  |  | 80,500 |  |  |  |  |  | 81,559 |
Total Core Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  | 228,310 |  |  |  |  |  | 257,735 |
Fund II Fixed Rate |  |  | — |  |  | 4.75% |  |  |  |  |  | — |  |  |  |  |  | 200,000 |
Fund II Variable Rate |  | LIBOR+3.00% - PRIME+2.00% |  |  | LIBOR+3.00% |  |  | Mar 2022 - May 2022 |  |  | 228,282 |  |  |  |  |  | 24,225 |
Fund II Variable Rate - Swapped (a) |  | 2.88% |  |  | 2.88% |  |  | Nov 2021 |  |  | 18,803 |  |  |  |  |  | 19,073 |
Total Fund II Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  | 247,085 |  |  |  |  |  | 243,298 |
Fund III Variable Rate |  | LIBOR+2.75%-LIBOR+3.10% |  |  | LIBOR+2.75%-LIBOR+3.10% |  |  | Jun 2021 - Jul 2022 |  |  | 71,918 |  |  |  |  |  | 74,554 |
Fund IV Fixed Rate |  | 3.40%-4.50% |  |  | 3.40%-4.50% |  |  | Oct 2025 - Jun 2026 |  |  | 6,726 |  |  |  |  |  | 8,189 |
Fund IV Variable Rate |  | LIBOR+1.60%-LIBOR+3.40% |  |  | LIBOR+1.60%-LIBOR+3.40% |  |  | Feb 2021 - Oct 2025 |  |  | 175,009 |  |  |  |  |  | 157,015 |
Fund IV Variable Rate - Swapped (a) |  | 3.48%-4.61% |  |  | 3.48%-4.61% |  |  | Apr 2022 - Dec 2022 |  |  | 66,590 |  |  |  |  |  | 102,699 |
Total Fund IV Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  |  | 248,325 |  |  |  |  |  | 267,903 |
Fund V Variable Rate |  | LIBOR+1.50%-LIBOR+2.20% |  |  | LIBOR+1.50%-LIBOR+2.20% |  |  | Feb 2021 - Dec 2024 |  |  | 1,354 |  |  |  |  |  | 1,387 |
Fund V Variable Rate - Swapped (a) |  | 2.95%-4.78% |  |  | 2.95%-4.78% |  |  | Feb 2021 - Dec 2024 |  |  | 334,323 |  |  |  |  |  | 334,626 |
Total Fund V Mortgage Payable |  |  |  |  |  |  |  |  |  |  |  |  | 335,677 |  |  |  |  |  | 336,013 |
Net unamortized debt issuance costs |  |  |  |  |  |  |  |  |  |  |  |  | (6,507 | ) |  |  |  |  | (10,078 | )
Unamortized premium |  |  |  |  |  |  |  |  |  |  |  |  | 548 |  |  |  |  |  | 651 |
Total Mortgages Payable |  |  |  |  |  |  |  |  |  |  |  | $ | 1,125,356 |  |  |  |  | $ | 1,170,076 |
Unsecured Notes Payable |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core Variable Rate Unsecured Term Loans |  | LIBOR+2.55% |  |  |  | — |  |  | Jun 2021 |  | $ | 30,000 |  |  |  |  | $ | — |
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 |  |  |  |  |  |  |  |  |  |  |  |  | 380,000 |  |  |  |  |  | 350,000 |
Fund II Unsecured Notes Payable |  | LIBOR+1.65% |  |  | LIBOR+1.65% |  |  | Sep 2021 |  |  | 40,000 |  |  |  |  |  | 40,000 |
Fund IV Term Loan/Subscription Facility |  | LIBOR+1.90%-LIBOR+2.00% |  |  | LIBOR+1.65%-LIBOR+2.00% |  |  | Jun 2021 - Dec 2021 |  |  | 80,089 |  |  |  |  |  | 87,625 |
Fund V Subscription Facility |  | LIBOR+1.60% |  |  |  | — |  |  | May 2021 |  |  | 250 |  |  |  |  |  | — |
Net unamortized debt issuance costs |  |  |  |  |  |  |  |  |  |  |  |  | (256 | ) |  |  |  |  | (305 | )
Total Unsecured Notes Payable |  |  |  |  |  |  |  |  |  |  |  | $ | 500,083 |  |  |  |  | $ | 477,320 |
Unsecured Line of Credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core Unsecured Line of Credit -Swapped (a) |  | 2.49%-5.02% |  |  | 2.49%-5.02% |  |  | Mar 2022 |  | $ | 138,400 |  |  |  |  | $ | 60,800 |
Total Debt - Fixed Rate (b, c ) |  |  |  |  |  |  |  |  |  |  |  | $ | 1,143,152 |  |  |  |  | $ | 1,403,324 |
Total Debt - Variable Rate (d) |  |  |  |  |  |  |  |  |  |  |  |  | 626,902 |  |  |  |  |  | 314,604 |
Total Debt |  |  |  |  |  |  |  |  |  |  |  |  | 1,770,054 |  |  |  |  |  | 1,717,928 |
Net unamortized debt issuance costs |  |  |  |  |  |  |  |  |  |  |  |  | (6,763 | ) |  |  |  |  | (10,383 | )
Unamortized premium |  |  |  |  |  |  |  |  |  |  |  |  | 548 |  |  |  |  |  | 651 |
Total Indebtedness |  |  |  |  |  |  |  |  |  |  |  | $ | 1,763,839 |  |  |  |  | $ | 1,708,196 |
(a) | At December 31, 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 $988.6 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, 2020 and 2019 includes $3.2 million and $70.2 million, respectively of Core swaps that may be used to hedge debt instruments of the Funds.
(d) | Includes $139.2 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. On December 17, 2020, the Company modified certain of its financial covenants on its Credit Facility, along with its $30.0 million Core Term Loan, which had no impact on its borrowing capacity. Mortgages Payable During the year ended December 31, 2020, the Company:
| • | extended the maturity date of a $200.0 million Fund II loan from May 2020 to May 2022. In addition, the Company extended seven Fund mortgages, two of which were extended for one year during the first quarter with aggregate outstanding balances of $46.0 million at December 31, 2020, two of which was extended for one year during the second quarter with an aggregate outstanding balance of $51.3 million at December 31, 2020, one of which were extended for one year during the third quarter with aggregate outstanding balances of $40.0 million at December 31, 2020, and two of which were extended for a minimum of one year during the fourth quarter with aggregate outstanding balances of $88.0 million at December 31, 2020;
| • | modified the terms of one Fund IV $23.8 million mortgage, which had $18.9 million outstanding, in June 2020 to adjust the allowable timing of draws. At closing, an additional $1.0 million was drawn and in July 2020 an additional $0.9 million was drawn. The Company also modified one Fund III and two Fund IV loans aggregating $103.4 million requiring the repayment of $11.5 million;
| • | entered into two swap agreements in February 2020 each with notional values of $50.0 million, which are not effective until April 2022 and April 2023. In July 2020, two previously-executed forward swap agreements took effect with current notional values as of December 31, 2020 of $30.4 million each (Note 8);
| • | repaid one Core mortgage of $26.3 million in connection with the litigation settlement discussed below and one Fund IV mortgage of $11.6 million in connection with the sale of Colonie Plaza in April 2020 (Note 2); and
| • | made scheduled principal payments of $6.1 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 December 31, 2020 a Fund mortgage and a Fund IV term loan aggregating $115.2 million, or $27.1 million at the Company’s share, had not met their liquidity requirements. In addition, at that same date, three Fund mortgages aggregating $124.1 million, or $25.6 million at the Company’s share, had not met their debt yield and/or debt service coverage ratio requirements. Some of these lenders may require cash sweeps of property rents until these conditions are remedied. At December 31, 2020 and 2019, the Company’s mortgages were collateralized by 42 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 on any 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 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 bore interest at a stated rate of approximately 6.00% and was subject to additional default interest of 5.00%. 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 also 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 alleged that the Operating Partnership was liable for the original principal, accrued interest, default interest, late charges as well as fees, costs and protective advances, under the Brandywine Loan, which the Successor Lender alleged 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 had 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 Successor Lender’s 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, during 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. Brandywine Holdings and the Operating Partnership filed a notice of appeal of the ruling by the Delaware Superior Court and the lender filed a notice of cross-appeal. On October 2, 2020, on request of all parties to the litigation, the appeal and cross-appeal were stayed by the Supreme Court of Delaware for a period of 90 days so that the parties could pursue settlement of the litigation. On October 30, 2020, the Company settled the litigation for approximately $30.0 million resulting in a gain on debt extinguishment of $18.3 million reflected in Realized and unrealized holding gains on investments and other in the consolidated statement of operations, of which the Company’s proportionate share was $4.1 million. Upon settlement of this litigation, the Company obtained its partner’s 78.22% noncontrolling interest for nominal consideration, resulting in a negative adjustment of $15.9 million to equity (Note 10). 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 income of $5.0 million, of which the Company’s proportionate share was $1.4 million, which is included in Realized and unrealized holding gains on investments and other in the consolidated statements of operations. Unsecured Notes Payable Unsecured notes payable for which total availability was $128.7 million and $152.5 million at December 31, 2020 and 2019, respectively, are comprised of the following:
| • | The outstanding balance of the Core term loan was $350.0 million at each of December 31, 2020 and 2019. The Company previously entered into swap agreements fixing the rates of the remaining Core term loan balance.
| • | On July 1, 2020, the Company obtained an additional $30.0 million Core term loan, with an accordion option to increase up to $90.0 million. This term loan matures on June 30, 2021 and bears interest at LIBOR plus 2.55% with a LIBOR floor of 0.75%. The outstanding balance and total availability at December 31, 2020 was $30.0 million and $0, respectively.
| • | 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, 2020 and 2019. Total availability was $0.0 at each of December 31, 2020 and 2019.
| • | Fund IV has a $79.2 million bridge facility and a $5.0 million subscription line which was modified from the previous limit of $15.0 million during the fourth quarter of 2020. 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, respectively, at each of December 31, 2020 and 2019. The outstanding balance and total availability of the Fund IV subscription line was $0.9 million and $0.5 million, respectively at December 31, 2020, reflecting letters of credit of $3.6 million. The outstanding balance and total availability of the Fund IV subscription line 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. During the year ended December 31, 2020, the Company modified the $150.0 million Fund V Subscription line and extended the due date from May 2020 to May 2021. The outstanding balance and total available credit of the Fund V subscription line was $0.3 million and $128.2 million, respectively at December 31, 2020 reflecting letters of credit of $21.5 million. The outstanding balance and total available credit of the Fund V subscription line was $0 and $150.0 million, respectively at December 31, 2019.
Unsecured Revolving Line of Credit The Company had a total of $101.1 million and $173.6 million, respectively, available under its $250.0 million Core Revolver, reflecting borrowings of $138.4 and $60.8 million and letters of credit of $10.5 million and $15.6 million at December 31, 2020 and 2019, respectively. At each of December 31, 2020 and 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 December 31, 2020 are as follows (in thousands):
Year Ending December 31, |  |  |  |
2021 |  | $ | 416,614 |
2022 |  |  | 528,008 |
2023 |  |  | 415,506 |
2024 |  |  | 212,020 |
2025 |  |  | 65,325 |
Thereafter |  |  | 132,581 |
|  |  | 1,770,054 |
Unamortized premium |  |  | 548 |
Net unamortized debt issuance costs |  |  | (6,763 | )
Total indebtedness |  | $ | 1,763,839 |
The table above does not reflect available extension options (subject to customary conditions) on consolidated debt of $231.3 million contractually due in 2021, $266.3 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.

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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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