XML 23 R13.htm IDEA: XBRL DOCUMENT v3.22.2
Debt
 6 Months Ended
Jun. 30, 2022
Notes and Loans Payable [Abstract]  
Debt Debt
The Company's debt consists of mortgages payable, unsecured term loans, and an unsecured revolving line of credit. The Company believes 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. 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.
The Company's credit agreements and mortgage loans require compliance with certain covenants, such as debt service coverage ratios, investment restrictions and distribution limitations. As of June 30, 2022 and December 31, 2021, the Company was in compliance with all loan covenants.
Credit Agreements
On December 21, 2018, the Company entered into an unsecured revolving credit agreement, which amended and restated its prior unsecured revolving credit agreement in its entirety, and provided for a $350,000 unsecured revolving line of credit (the "Revolving Credit Agreement"). On September 22, 2021, the Company entered into an amendment to the Revolving Credit Agreement (the "Amended Revolving Credit Agreement"), which provides for, among other things, an extension of the maturity of the $350,000 Revolving Credit Agreement to September 22, 2025, with two six-month extension options.
On December 21, 2018, the Company entered into an unsecured term loan credit agreement, which amended and restated its prior unsecured term loan credit agreement in its entirety (the “Term Loan Credit Agreement”). On September 22, 2021, the Company entered into an amendment to its $400,000 Term Loan Credit Agreement (the "Amended Term Loan Agreement"), which provides for, among other things, an extension of the maturity dates and a reallocation of indebtedness under the two outstanding tranches of term loans thereunder. The Amended Term Loan Agreement consists of a $200,000 5-year tranche maturing on September 22, 2026, and a $200,000 5.5-year tranche maturing on March 22, 2027.
On May 11, 2022, the Company transitioned its Amended Revolving Credit Agreement and Amended Term Loan Agreement from 1-Month LIBOR to a Secured Overnight Financing Rate ("SOFR") which reprices monthly ("1-Month Term SOFR").
On June 3, 2022, in connection with and upon effectiveness of the Note Purchase Agreement (as defined below) and in accordance with the terms of the Amended Term Loan Credit Agreement and Amended Revolving Credit Agreement, each of the administrative agents under such agreements released all of the subsidiary guarantors from their guaranty obligations that were previously made for the benefit of the lenders under such agreements.
Interest Rate Swaps
The Company is party to four interest rate forward swap agreements which address the periods between the maturity dates of the four effective swaps and the maturity dates of the Amended Term Loan Agreement. Although the Amended Term Loan Agreement is priced in 1-Month Term SOFR and the interest rate swaps are priced in 1-Month LIBOR, the Company's hedging instruments continue to qualify for cash flow hedge accounting. In tandem, the interest rate swaps effectively fix the interest rates for a constant notional amount through the maturity dates of the Amended Term Loan Agreement.
Senior Notes Payable
On June 3, 2022, the Company entered into a note purchase agreement (the "Note Purchase Agreement") with the various purchasers named therein providing for the private placement of $250 million aggregate principal amount of senior notes by the Company of which (i) $150 million are designated as 5.07% Senior Notes, Series A, due August 11, 2029 (the "Series A Notes") and (ii) $100 million are designated as 5.20% Senior Notes, Series B, due August 11, 2032 (the "Series B Notes" and, together with the Series A Notes, the "Notes"). The Series A Notes and the Series B Notes are expected to be issued on August 11, 2022, each subject to customary closing conditions. Upon issuance, the Notes will pay interest semiannually on February 11th and August 11th until their respective maturities.
After the issuance thereof, the Company may prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of any series of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid plus accrued interest and a Make-Whole Amount (as defined in the Note Purchase Agreement). The Notes will be required to be absolutely and unconditionally guaranteed by certain subsidiaries of the Company that guarantee certain material credit facilities of the Company. Currently, there are no subsidiary guarantees under the Note Purchase Agreement. The Company intends to use the net proceeds from the offering for general corporate purposes, including the repayment of indebtedness and future acquisitions.
The following table summarizes the Company's debt as of June 30, 2022 and December 31, 2021:
Interest
Rate Type		As of June 30, 2022As of December 31, 2021
Maturity DateInterest RateAmountInterest RateAmount
Mortgages Payable
Total mortgages payableVariousFixed3.9500%$163,485 4.0700%$105,955 
Term loans
$200.0 million 5 years
9/22/2026Fixed2.6795% (a)100,000 2.6795% (a)100,000 
$200.0 million 5 years
9/22/2026Fixed2.6795% (a)100,000 2.6795% (a)100,000 
$200.0 million 5.5 years
3/22/2027Fixed2.6915% (a)50,000 2.6915% (a)50,000 
$200.0 million 5.5 years
3/22/2027Fixed2.6990% (a)50,000 2.6990% (a)50,000 
$200.0 million 5.5 years
3/22/2027Variable
1M SOFR +
1.30% (b)
100,000 
1M LIBOR +
 1.20% (b)
100,000 
Total400,000 400,000 
Revolving Line of Credit
$350.0 million total capacity
9/22/2025 (d)Variable
1M SOFR +
 1.14% (b) (c)
143,000 
1M LIBOR +
 1.05% (b)
31,000 
Total debt3.0494%706,485 2.6122%536,955 
Debt discounts and issuance costs, net of accumulated amortization(3,683)(3,873)
Debt, net$702,802 $533,082 
(a)Interest rates reflect the fixed rates effectively achieved through the Company's interest rate swaps.
(b)As of June 30, 2022 and December 31 2021, 1-Month Term SOFR was 1.6860% and 1-Month LIBOR was 0.1013%, respectively.
(c)The Company qualified for a 0.01% sustainability adjustment for the six months ended June 30, 2022.
(d)Maturity date is not inclusive of two six-month extension options.
The following table summarizes the scheduled maturities of the Company's mortgages payable as of June 30, 2022 for the remainder of 2022, each of the next four years and thereafter.
Scheduled maturities by year:As of June 30, 2022
2022$— 
202338,775 
202415,700 
202551,510 
2026— 
Thereafter57,500 
Total mortgage payable maturities$163,485