Debt

As of December 31, 2018, the Company's total debt, net, was $561,782, which consists of mortgages payable, net, of $212,927 and credit agreements, net, of $348,855. The Company believes that it has the ability to repay, refinance or extend any of its debt, and that it has adequate sources of funds to meet short-term cash needs related to its mortgages payable and credit agreements. It is anticipated that the Company will use proceeds from property sales, cash on hand, and available capacity on credit agreements, if any, to repay, refinance or extend the mortgages payable maturing in the near term.

Mortgages payable

As of December 31, 2018 and 2017, the Company had the following mortgages payable outstanding:



	December 31, 2018			December 31, 2017
Mortgages payable (a)	$	213,925		$	370,804
Premium, net of accumulated amortization	239			478
Discount, net of accumulated amortization	(158		)	(195		)
Debt issuance costs, net of accumulated amortization	(1,079		)	(1,611		)
Total mortgages payable, net	$	212,927		$	369,476


(a)	Mortgages payable had fixed interest rates ranging from 3.49% to 5.49%, with a weighted average interest rate of 4.33% as of December 31, 2018, and 3.49% to 10.45% (for both conforming loans and loans in default), with a weighted average interest rate of 5.13% as of December 31, 2017.

Some of the mortgage loans require compliance with certain covenants, such as debt service coverage ratios, investment restrictions and distribution limitations. As of December 31, 2018, the Company was in compliance with all mortgage loan requirements.

As of December 31, 2017, the Company was in compliance with all mortgage loan requirements except two non-recourse loans in default and receivership, Stonecrest Marketplace and Bellerive Plaza. During the year ended December 31, 2018, these properties were surrendered to the lender in satisfaction of non-recourse debt as disclosed in "Note 5. Disposed Properties".

The following table shows the scheduled maturities of the Company's mortgages payable as of December 31, 2018, for each of the next five years, and thereafter:



	Maturities during the year ending December 31,
	2019		2020		2021		2022		2023		Thereafter		Total
Mortgages payable	$	—	$	41,000	$	12,557	$	50,748	$	41,740	$	67,880	$	213,925

Credit agreements

Unsecured term loans

On December 21, 2018, the Company entered into an amended and restated unsecured term loan credit agreement with a syndicate of lenders led by Wells Fargo Bank, National Association, as administrative agent (the "Term Loan Agreement"). The Term Loan Agreement, which amends and restates the Company’s prior term loan agreement in its entirety, provides for $400,000 in unsecured term loans. The Term Loan Agreement consists of two tranches of term loans: a $250,000 5-year tranche maturing on December 21, 2023 and a $150,000 5.5-year tranche maturing on June 21, 2024. Interest rates are based on the Company's total leverage ratio or, at the Company's one-time irrevocable option, upon achievement of an investment grade credit rating. Based upon the Company's total leverage ratio, as of December 31, 2018, the outstanding 5-year tranche loans bear interest at a rate of 1-Month LIBOR plus 1.20% and the outstanding 5.5-year tranche loans bear interest at a rate of 1-Month LIBOR plus 1.20%. An unused fee is charged on the unused portion of the term loans at a rate ranging from 0.15% to 0.25% depending on the Company’s total leverage ratio. Based on the Company's total leverage ratio, as of December 31, 2018, the unused fee was 0.15%.

As of the closing date of the Term Loan Agreement, the Company borrowed $226,000 under the 5-year tranche and $126,000 under the 5.5-year tranche, of which $26,000 from each tranche was used to pay off a $52,000 outstanding unsecured revolving line of credit balance that was borrowed on July 12, 2018. As of December 31, 2018, the Company had $24,000 available for borrowing under the 5-year tranche and $24,000 available for borrowing under the 5.5-year tranche.

On November 5, 2015, the Company entered into a term loan credit agreement for a $300,000 unsecured credit facility with an accordion feature that allowed the Company to increase the size of the unsecured term loan credit facility to $600,000, subject to certain conditions. The term loan credit facility is subject to maintenance of certain financial covenants. As of December 31, 2017, the Company was in compliance with all of the covenants and default provisions under the credit agreement.

Unsecured revolving line of credit

On December 21, 2018, the Company entered into a second amended and restated unsecured revolving credit agreement with a syndicate of lenders led by KeyBank National Association, as administrative agent (the "Revolving Credit Agreement"). The Revolving Credit Agreement, which amends and restates the Company’s prior revolving credit agreement in its entirety, provides for a $350,000 unsecured revolving line of credit. The Revolving Credit Agreement has a 4-year term maturing on December 21, 2022 with two six month extension options. Interest rates are based on the Company's total leverage ratio or, at the Company's one-time irrevocable option, upon achievement of an investment grade credit rating. Based upon the Company's total leverage ratio, as of December 31, 2018, outstanding revolving loans bear interest at a rate of LIBOR plus 1.05%. A facility fee accrues on the aggregate commitments at a rate ranging from 0.15% to 0.30% depending on the Company’s total leverage ratio. Based on the Company's total leverage ratio, as of December 31, 2018, the facility fee was 0.15%. As of December 31, 2018, the Company had $350,000 available for borrowing under the Revolving Credit Agreement.

On February 3, 2015, the Company entered into an amended and restated credit agreement for a $300,000 unsecured revolving line of credit with an accordion feature that allows the Company to increase the size of its unsecured line of credit up to $600,000, subject to certain conditions. The unsecured revolving line of credit matures on February 2, 2019 and contains one twelve-month extension option that the Company may exercise upon payment of an extension fee equal to 0.15% of the commitment amount on the maturity date and subject to certain other conditions. The unsecured revolving line of credit bears interest at a rate equal to 1-Month LIBOR plus 1.40% and requires the maintenance of certain financial covenants. On July 12, 2018, the Company drew $52,000 on the unsecured revolving line of credit to repay some of the Company's mortgages payable.

As of December 31, 2018, the Company had the following borrowings outstanding under its unsecured term loans:



	Principal Balance			Interest Rate	Maturity Date
$250.0 million 5 year - swapped to fixed rate (a)	$	90,000		2.5510%	December 21, 2023
$250.0 million 5 year - swapped to fixed rate (b)	60,000			2.5525%	December 21, 2023
$250.0 million 5 year - variable rate (c)	50,000			3.5493%	December 21, 2023
$250.0 million 5 year - variable rate (d)	26,000			3.6794%	December 21, 2023
$150.0 million 5.5 year - variable rate (c)	100,000			3.5493%	June 21, 2024
$150.0 million 5.5 year - variable rate (d)	26,000			3.6794%	June 21, 2024
Total unsecured term loans	352,000
Issuance costs, net of accumulated amortization (e)	(3,145		)
Total outstanding credit agreements, net	$	348,855


(a)	The Company swapped $90,000 of variable rate debt at an interest rate of 1-Month LIBOR plus 1.2% to a fixed rate of 2.5510%. The swap has an effective date of December 10, 2015, a termination date of December 1, 2019, and a notional amount of $90,000.


(b)	The Company swapped $60,000 of variable rate debt at an interest rate of 1-Month LIBOR plus 1.2% to a fixed rate of 2.5525%. The swap has an effective date of December 10, 2015, a termination date of December 1, 2019, and a notional amount of $60,000.


(c)	Interest rate reflects 1-Month LIBOR plus 1.20% as of December 3, 2018.


(d)	Interest rate reflects 1-Month LIBOR plus 1.20% as of December 21, 2018.

(e)

Reflects issuance costs, net of accumulated amortization, of $1,966 related to the December 21, 2018 term loans, and $1,179 related to the November 5, 2015 term loans. In accordance with the Company's accounting policy for debt modification, the Company did not write-off the issuance costs associated with the modification of the November 5, 2015 term loans as it did not meet the criteria of a substantial modification.

As of December 31, 2017, the Company had the following borrowings outstanding under its unsecured term loan:



	Principal Balance			Interest Rate	Maturity Date
5 year - swapped to fixed rate (a)	$	90,000		2.6510%	January 15, 2021
5 year - swapped to fixed rate (b)	60,000			2.6525%	January 15, 2021
5 year - variable rate (c)	50,000			2.6607%	January 15, 2021
7 year - variable rate (d)	100,000			2.9607%	November 5, 2022
Total unsecured term loans	300,000
Issuance costs, net of accumulated amortization	(1,615		)
Total outstanding credit agreements, net	$	298,385


(a)	The Company swapped the $90,000 of variable rate debt at an interest rate of 1-Month LIBOR plus 1.3% to a fixed rate of 2.6510%. The swap has an effective date of December 10, 2015, a termination date of December 1, 2019, and a notional amount of $90,000.


(b)	The Company swapped $60,000 of variable rate debt at an interest rate of 1-Month LIBOR plus 1.3% to a fixed rate of 2.6525%. The swap has an effective date of December 10, 2015, a termination date of December 1, 2019, and a notional amount of $60,000.


(c)	Interest rate reflects 1-Month LIBOR plus 1.3% as of December 31, 2017.


(d)	Interest rate reflects 1-Month LIBOR plus 1.6% as of December 31, 2017.

For the years ending December 31, 2018 and 2017, each of the Company's interest rate swaps are in an asset position and included within deferred costs and other assets, net on the accompanying consolidated balance sheets. The Company has designated these interest rate swaps as cash flow hedges. The following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements:



Location and amount of gain recognized in accumulated comprehensive income					Location and amount of gain (loss) reclassified from accumulated comprehensive income into net income							Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded
	2018		2017	2016		2018		2017		2016			2018		2017	2016
Unrealized gain on derivatives	$	923	1,183	623	Interest expense, net	$	956	(423	)	(1,295	)	Interest expense, net	$	24,943	30,155	44,135

As the Company's interest rate swaps have a termination date of December 1, 2019, all net deferred amounts in accumulated comprehensive income will be reclassified into earnings during the next 11 months. As of December 31, 2018 and 2017, the Company's interest rate swap agreements had a notional value of $150,000.