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Debt
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Debt

7. Debt

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

 

 

 

 

 

 

Carrying Value as of

 

 

Interest Rate as of

Maturity Date as of

 

March 31,

 

December 31,

 

 

March 31, 2025

 

March 31, 2025

 

2025

 

2024

Mortgages Payable

 

 

 

 

 

 

 

 

Core

 

3.99% - 6.05%

 

Nov 2026 - Apr 2035

 

$281,761

 

$180,212

Fund II (a)

 

SOFR+2.61%

 

Aug 2025

 

137,485

 

137,485

Fund III

 

SOFR+3.75%

 

Oct 2025

 

33,000

 

33,000

Fund IV (b)

 

SOFR+2.25% - SOFR+3.33%

 

May 2025 - Jun 2028

 

109,464

 

109,471

Fund V

 

SOFR+2.00% - SOFR+3.10%

 

Apr 2025 - Jun 2028

 

497,563

 

498,779

Net unamortized debt issuance costs

 

 

 

 

 

(5,363)

 

(5,459)

Unamortized premium

 

 

 

 

 

1,922

 

212

Total Mortgages Payable

 

 

 

 

 

$1,055,832

 

$953,700

 

 

 

 

 

 

 

 

 

Unsecured Notes Payable

 

 

 

 

 

 

 

 

Core Term Loans (c)

 

SOFR+1.50% - SOFR+1.75%

 

Apr 2028 - Jul 2029

 

$475,000

 

$475,000

Core Senior Notes

 

5.86% - 5.94%

 

Aug 2027 - Aug 2029

 

100,000

 

100,000

Net unamortized debt issuance costs

 

 

 

 

 

(5,049)

 

(5,434)

Total Unsecured Notes Payable

 

 

 

 

 

$569,951

 

$569,566

 

 

 

 

 

 

 

 

 

Unsecured Line of Credit

 

 

 

 

 

 

 

 

Revolving Credit Facility (c)

 

SOFR+1.35%

 

Apr 2028

 

$—

 

$14,000

 

 

 

 

 

 

 

 

 

Total Debt (d)(e)

 

 

 

 

 

$1,634,273

 

$1,547,947

Net unamortized debt issuance costs

 

 

 

 

 

(10,412)

 

(10,893)

Unamortized premium

 

 

 

 

 

1,922

 

212

Total Indebtedness

 

 

 

 

 

$1,625,783

 

$1,537,266

 

(a)
The Company has a total borrowing capacity of $198.0 million on the Fund II property mortgage loan as of both March 31, 2025 and December 31, 2024.
(b)
Includes the outstanding balance on the Fund IV secured bridge facility of $36.2 million as of both March 31, 2025 and December 31, 2024.
(c)
The Company has entered into various swap agreements to effectively fix its interest costs on a portion of its Revolver and term loans as of March 31, 2025 and December 31, 2024 (Note 8).
(d)
Includes $939.3 million and $852.0 million, respectively, of variable-rate debt that has been fixed with interest rate swap agreements as of the periods presented. The effective fixed rates ranged from 1.98% to 4.54%.
(e)
Includes $111.2 million and $111.2 million, respectively, of variable-rate debt that is subject to interest cap agreements as of the periods presented. The effective fixed rates ranged from 5.00% to 6.00%.

Mortgages Payable

A portion of the Company’s variable-rate property mortgage debt has been effectively fixed through certain cash flow hedge transactions (Note 8).

At March 31, 2025 and December 31, 2024, the Company’s property mortgage loans were collateralized by 51 and 31 properties, respectively, as well as 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. As of March 31, 2025, a Fund V mortgage of $35.4 million, or $7.1 million at the Company’s share, had not met its debt service coverage ratio requirement. As this is not an event of default, the debt maturity was not accelerated.

Core Portfolio

During the three months ended March 31, 2025, the Company acquired an additional 48% economic ownership interest in the Renaissance Portfolio (Note 2). The properties were subject to existing mortgage indebtedness. At acquisition the property mortgage loans had an aggregate outstanding principal balance of $156.1 million, bore interest at the Secured Overnight Financing Rate (“SOFR”) + 2.55% and was scheduled to mature on November 6, 2026. The property mortgage loans were recorded at a fair value of approximately $156.1 million. On January 24, 2025, the venture modified the property mortgage loan to reduce the interest rate to SOFR + 1.55%. This reduction was achieved through a $50.0 million principal paydown, which was funded by the Company as a note receivable from the venture. The note bears interest at 9.11%, matures in November 2026, and has been eliminated in consolidation.

Investment Management

During the three months ended March 31, 2025, the Company, through Investment Management (amounts represent balances at the time of transactions):

•
extended one Investment Management property mortgage loan of $25.3 million, originally maturing in January 2025 to May 2025;
•
extended the Fund IV secured bridge facility which had an outstanding balance of $36.2 million, originally maturing in March 2025 to May 2025; and
•
made scheduled principal payments totaling $1.2 million.

Fund IV also has an outstanding balance and total available credit on its secured bridge facility of $36.2 million and $0.0 million, respectively, at both March 31, 2025 and December 31, 2024. The Operating Partnership has guaranteed up to $22.5 million of the Fund IV secured bridge facility (Note 9).

Unsecured Notes Payable

Core Term Loans

 

At March 31, 2025, the Term Loan had an outstanding balance of $400.0 million bears interest at SOFR + 1.50% and matures on April 15, 2028, subject to two six-month extension options.

The Operating Partnership has a $75.0 million term loan (the “$75.0 Million Term Loan”), with TD Bank, N.A., as administrative agent, which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating, matures on July 29, 2029, and is guaranteed by the Trust and certain subsidiaries of the Trust (Note 9). At March 31, 2025, the $75.0 Million Term Loan bears interest at SOFR+1.75%.

Senior Notes

On August 21, 2024, the Operating Partnership issued $100.0 million aggregate principal amount of senior unsecured notes in a private placement, of which (i) $20.0 million are designated as 5.86% Senior Notes, Series A, due August 21, 2027 (the “Series A Notes”) and (ii) $80.0 million are designated as 5.94% Senior Notes, Series B, due August 21, 2029 (together with the Series A Notes, the “Senior Notes”) pursuant to a note purchase agreement (the “Senior Note Purchase Agreement”), dated July 30, 2024, between the Company, Operating Partnership and the purchasers named therein.

The Senior Notes were issued at par in accordance with the Senior Note Purchase Agreement and pay interest semiannually on February 21st and August 21st until their respective maturities. The Company may prepay the Senior Notes at any time in full or in part subject to certain limitations set forth in the Senior Note Purchase Agreement. The Senior Notes are guaranteed by the Company and certain subsidiaries of the Company.

Revolving Credit Facility

At March 31, 2025, the Revolver bears interest at SOFR+1.35% and matures on April 15, 2028, subject to two six-month extension options. The outstanding balance and total available credit of the Revolver were $0.0 million and $525.0 million, respectively, as of March 31, 2025, reflecting no letters of credit outstanding. The outstanding balance and total available credit of the Revolver were $14.0 million and $511.0 million, respectively, as of December 31, 2024, reflecting no letters of credit outstanding.

 

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, 2025 are as follows (in thousands):

 

Year Ending December 31,

 

Principal Repayments

 

2025

 

$

475,888

 

2026

 

 

185,698

 

2027

 

 

214,676

 

2028

 

 

581,804

 

2029

 

 

173,292

 

Thereafter

 

 

2,915

 

 

 

 

1,634,273

 

Unamortized premium

 

 

1,922

 

Net unamortized debt issuance costs

 

 

(10,412

)

Total indebtedness

 

$

1,625,783

 

The table above does not reflect available extension options (subject to customary conditions) on consolidated debt with balances as of March 31, 2025. The Company has debt balances contractually due of $363.8 million in the remainder of 2025, $155.4 million in 2026, $191.9 million due in 2027 and $457.5 million in 2028, all of 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.