Debt

3 Months Ended

Mar. 31, 2021

7. Debt

A summary of the Company’s consolidated indebtedness is as follows (dollars in thousands):

	Interest Rate at			Carrying Value at
	March 31,	December 31,	Maturity Date at	March 31,			December 31,
	2021	2020	March 31, 2021	2021			2020
Mortgages Payable
Core Fixed Rate	3.88%-5.89%	3.88%-5.89%	Feb 2024 - Apr 2035	$	147,233		$	147,810
Core Variable Rate - Swapped ⁽^a)	3.41%-4.54%	3.41%-4.54%	Jan 2023 - Nov 2028		73,569			80,500
Total Core Mortgages Payable					220,802			228,310
Fund II Variable Rate	LIBOR+3.00% - PRIME+2.00%	LIBOR+3.00% - PRIME+2.00%	Mar 2022 - August 2022		229,101			228,282
Fund II Variable Rate - Swapped ⁽^a)	2.88%	2.88%	Nov 2021		18,733			18,803
Total Fund II Mortgages Payable					247,834			247,085
Fund III Variable Rate	LIBOR+2.75%-LIBOR+3.10%	LIBOR+2.75%-LIBOR+3.10%	Jun 2021 - Jul 2022		71,613			71,918
Fund IV Fixed Rate	3.40%-4.50%	3.40%-4.50%	Oct 2025 - Jun 2026		6,726			6,726
Fund IV Variable Rate	LIBOR+1.60%-LIBOR+3.40%	LIBOR+1.60%-LIBOR+3.40%	Apr 2021 - Oct 2025		245,302			254,234
Fund IV Variable Rate - Swapped ⁽^a)	3.48%-4.61%	3.48%-4.61%	Apr 2022 - Dec 2022		66,250			66,590
Total Fund IV Mortgages and Other Notes Payable					318,278			327,550
Fund V Variable Rate	LIBOR+1.50%-LIBOR+2.20%	LIBOR+1.50%-LIBOR+2.20%	Jun 2021 - Dec 2024		1,077			1,354
Fund V Variable Rate - Swapped ^(a)	2.95%-4.78%	2.95%-4.78%	Jun 2021 - Dec 2024		334,339			334,323
Total Fund V Mortgages Payable					335,416			335,677
Net unamortized debt issuance costs					(5,770	)		(6,507	)
Unamortized premium					522			548
Total Mortgages Payable				$	1,188,695		$	1,204,581
Unsecured Notes Payable
Core Variable Rate Credit Facility	LIBOR+2.55%	LIBOR+2.55%	Jun 2021	$	30,000		$	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			380,000
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+1.90%	Dec 2021		1,400			864
Fund V Subscription Facility	LIBOR+1.60%	LIBOR+1.60%	May 2021		—			250

Net unamortized debt issuance costs					(440	)		(256	)
Total Unsecured Notes Payable				$	420,960		$	420,858
Unsecured Line of Credit
Core Unsecured Line of Credit -Swapped ^(a)	2.49%-5.02%	2.49%-5.02%	Mar 2022	$	105,400		$	138,400

Total Debt - Fixed Rate ^(b,^{c )}				$	1,102,250		$	1,143,152
Total Debt - Variable Rate ^(d)					618,493			626,902
Total Debt					1,720,743			1,770,054
Net unamortized debt issuance costs					(6,210	)		(6,763	)
Unamortized premium					522			548
Total Indebtedness				$	1,715,055		$	1,763,839

(a)

At March 31, 2021, 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 +2.00% 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 $948.3 million and $988.6 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 March 31, 2021 and December 31, 2020 includes $36.2 million and $3.2 million, respectively of Core swaps that may be used to hedge debt instruments of the Funds.

(d)

Includes $140.0 million and $139.2 million, respectively, of variable-rate debt that is subject to interest cap agreements.

Credit Facility

The Company has a $600.0 million senior unsecured credit facility (the “Credit Facility”), comprised of a $250.0 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%. The revolving credit facility matures on March 31, 2022, subject to two six-month extension options, and the $350.0 million Term Loan expires on March 31, 2023.

Mortgages and Other Notes Payable

During the three months ended March 31, 2021, the Company:

•

extended three Fund mortgages, two of which were extended for one year with aggregate outstanding balances of $37.7 million at March 31, 2021 and one of which was extended for one month with an outstanding balance of $23.1 million at March 31, 2021;

•

modified the terms of the Fund IV Bridge facility which had an outstanding balance of $79.2 million. Fund IV repaid $10.0 million of principal, the maturity date was extended from June 30, 2021 to December 31, 2021, and the interest rate was changed from LIBOR plus 2.0% to LIBOR plus 2.5% with a floor of 0.25%;

•

entered into a swap agreement in January 2021 with a notional value of $16.7 million, for its New Towne Plaza mortgage replacing the existing swap which expired. In addition, the Company terminated two forward starting interest rate swaps resulting in cash proceeds of approximately $3.4 million (Note 8);

•

repaid one Core mortgage of $6.7 million in connection with the sale of 60 Orange Street in January 2021 (Note 2); and

•

made scheduled principal payments of $2.0 million.

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 were extended for one year during the second quarter with an aggregate outstanding balance of $51.3 million at December 31, 2020, one of which was 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 and were later terminated in the first quarter of 2021. 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.

At March 31, 2021, a Fund III mortgage in the amount of $35.6 million, or $8.7 million at the Company’s share, had not met its liquidity requirement; however, this condition is expected to be remedied by the sale of 654 Broadway, which is reflected as held for sale at March 31, 2021 (Note 2).

At March 31, 2021 and December 31, 2020, the Company’s mortgages were collateralized by 41 and 42 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. A portion of the Company’s variable-rate mortgage debt has been effectively fixed through certain cash flow hedge transactions (Note 8).

A 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. 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 during the fourth quarter of 2020, of which the Company’s proportionate share was $4.1 million. Upon settlement of this litigation, the Company obtained its partner’s 77.78% noncontrolling interest for nominal consideration, resulting in a negative adjustment of $15.9 million to equity.

Unsecured Notes Payable

Unsecured notes payable for which total availability was $127.8 million and $128.7 million at March 31, 2021 and December 31, 2020, respectively, are comprised of the following:

•

The outstanding balance of the Core term loan was $350.0 million at each of March 31, 2021 and December 31, 2020. 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 at each of March 31, 2021 and December 31, 2020 was $30.0 million. There was no availability at each of March 31, 2021 and December 31, 2020.

•

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 March 31, 2021 and December 31, 2020. There was no availability at each of March 31, 2021 and December 31, 2020.

•

Fund IV has a $5.0 million subscription line with an outstanding balance and total available credit of $1.4 million and $0, respectively at March 31, 2021, reflecting letters of credit of $3.6 million. The outstanding balance and total availability at December 31, 2020 were $0.9 million and $0.5 million, respectively, reflecting letters of credit of $3.6 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 and $127.8 million, respectively at March 31, 2021 reflecting outstanding letters of credit of $22.2 million. The outstanding balance were $0.3 million and $128.2 million at December 31, 2020 reflecting outstanding letters of credit of $21.5 million.

Unsecured Revolving Line of Credit

The Company had a total of $136.6 million and $101.1 million, respectively, available under its $250.0 million Core Revolver, reflecting borrowings of $105.4 million and $138.4 million and letters of credit of $8.0 million and $10.5 million at March 31, 2021 and December 31, 2020, respectively. At each of March 31, 2021 and December 31, 2020, 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 March 31, 2021 are as follows (in thousands):

Year Ending December 31,
2021	$	365,838
2022		535,612
2023		409,359
2024		212,020
2025		65,326
Thereafter		132,588
		1,720,743
Unamortized premium		522
Net unamortized debt issuance costs		(6,210	)
Total indebtedness	$	1,715,055

The table above does not reflect available extension options (subject to customary conditions) on consolidated debt of $260.5 million contractually due in 2021, $250.6 million contractually due in 2022, and $41.5 million contractually due in 2023; most 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.