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Notes Payable | 3 Months Ended
--- | ---
Mar. 31, 2015
Debt Disclosure [Abstract] |
Notes Payable | Notes Payable The following table sets forth information as of March 31, 2015 with respect to our outstanding indebtedness.
| Outstanding |  |  |  |
Debt | March 31, 2015 |  | December 31, 2014 |  | Interest Rate(1) |  | Maturity Date
Unsecured revolving credit facility | $ | — |  |  | $ | 130,000 |  |  | LIBOR+ 1.15% to 1.55% |  | 9/23/2018
Unsecured term loan | 150,000 |  |  | 150,000 |  |  | LIBOR+ 1.30% to 1.90% |  | 9/23/2019
Mortgage loan secured by 275 Brannan(2) | 15,000 |  |  | 15,000 |  |  | LIBOR+2.00% |  | 10/5/2015
Mortgage loan secured by Pinnacle II(3) | 87,111 |  |  | 87,421 |  |  | 6.313% |  | 9/6/2016
Mortgage loan secured by 901 Market(4) | 49,600 |  |  | 49,600 |  |  | LIBOR+2.25% |  | 10/31/2016
Mortgage loan secured by Element LA(5) | 59,809 |  |  | 59,490 |  |  | LIBOR+1.95% |  | 11/1/2017
Mortgage loan secured by Rincon Center(6) | 103,803 |  |  | 104,126 |  |  | 5.134% |  | 5/1/2018
Mortgage loan secured by Sunset Gower/Sunset Bronson(7) | 97,000 |  |  | 97,000 |  |  | LIBOR+2.25% |  | 3/4/2019
Mortgage loan secured by Met Park North(8) | 64,500 |  |  | 64,500 |  |  | LIBOR+1.55% |  | 8/1/2020
Mortgage loan secured by 10950 Washington(9) | 28,748 |  |  | 28,866 |  |  | 5.316% |  | 3/11/2022
Mortgage loan secured by Pinnacle I(10) | 129,000 |  |  | 129,000 |  |  | 3.954% |  | 11/7/2022
Subtotal | $ | 784,571 |  |  | $ | 915,003 |  |  |  |  |
Unamortized loan premium, net(11) | 2,619 |  |  | 3,056 |  |  |  |  |
Total | $ | 787,190 |  |  | $ | 918,059 |  |  |  |  |
Mortgage loan on real estate held for sale: |  |  |  |  |  |  |
Mortgage loan secured by First Financial(12) | $ | — |  |  | $ | 42,449 |  |  | 4.580% |  | 2/1/2022
| $ | 787,190 |  |  | $ | 960,508 |  |  |  |  |
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(1) | Interest rate with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed, excluding the amortization of loan fees and costs.
(2) | Subsequent to March 31, 2015 the loan was fully repaid.
(3) | This loan was assumed on June 14, 2013 in connection with the contribution of the Pinnacle II building to the Company’s joint venture with M. David Paul & Associates/Worthe Real Estate Group. This loan bore interest only for the first five years. Beginning with the payment due October 6, 2011, monthly debt service includes annual debt amortization payments based on a 30-year amortization schedule.
(4) | On October 29, 2012, we obtained a loan for our 901 Market property pursuant to which we borrowed $49.6 million upon closing, with the ability to draw up to an additional $11.9 million for budgeted base building, tenant improvements, and other costs associated with the renovation and lease-up of that property. Subsequent to March 31, 2015, we paid down the outstanding loan balance by $19.6 million.
(5) | On November 24, 2014 we amended our construction loan for Element LA to, among other things, increase availability from $65.5 million to $102.4 million for budgeted site-work, construction of a parking garage, base building, tenant improvement, and leasing commission costs associated with the renovation and lease-up of the property.
(6) | This loan is amortizing based on 30-year amortization schedule.
(7) | On March 16, 2011, we purchased an interest rate cap in order to cap one-month LIBOR at 3.715% with respect to $50.0 million of the loan through February 11, 2016. On January 11, 2012 we purchased an interest rate cap in order to cap one-month LIBOR at 2.00% with respect to $42.0 million of the loan through February 11, 2016. Effective March 4, 2015, the terms of this loan were amended and restated to introduce the ability to draw up to an additional $160.0 million for budgeted construction costs associated with our ICON development and to extend the maturity date from February 11, 2018 to March 4, 2019.
(8) | This loan bears interest only at a rate equal to one-month LIBOR plus 1.55%. The full loan amount is subject to an interest rate contract that swapped one-month LIBOR to a fixed rate of 2.1644% through the loan’s maturity on August 1, 2020.
(9) | This loan is amortizing based on a 30-year amortization schedule.
(10) | This loan bears interest only for the first five years. Beginning with the payment due December 6, 2017, monthly debt service will include annual debt amortization payments based on a 30-year amortization schedule, for total annual debt service of $7,349.
(11) | Represents unamortized amount of the non-cash mark-to-market adjustment on debt associated with Pinnacle II.
(12) | This note has been recorded as part of the liabilities associated with real estate held for sale (see note 3).
The Company presents its financial statements on a consolidated basis. Notwithstanding such presentation, except to the extent expressly indicated, such as in the case of the project financing for our Sunset Gower and Sunset Bronson properties, our separate property-owning subsidiaries are not obligors of the debt of their respective affiliates and each property-owning subsidiary’s separate liabilities do not constitute obligations of its respective affiliates. The minimum future annual principal payments due on our secured and unsecured notes payable at March 31, 2015, excluding the non-cash loan premium amortization, were as follows (in thousands):
2015 (nine months ending December 31, 2015) | $ | 17,572 |
2016 | 138,199 |
2017 | 62,514 |
2018 | 198,320 |
2019 | 152,885 |
Thereafter | 215,081 |
Total | $ | 784,571 |
Senior Unsecured Revolving Credit Facility On September 23, 2014, the Company amended and restated its $250.0 million unsecured revolving credit facility to increase the unsecured revolving credit facility from $250.0 million to $300.0 million, extend the term of that facility to September 23, 2018, and add a five-year, $150 million unsecured term loan facility with a group of lenders for which Wells Fargo Bank, N.A. acts as administrative agent, and Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner and Smith Incorporated act as joint lead arrangers, and Bank of America, N.A. and Barclays Bank PLC, act as joint syndication agents, and Keybank, N.A., acts as documentation agent. The $150 million unsecured term loan facility was fully drawn by the Company on the closing date to repay a $95.0 million loan secured by the Company’s 505 First Street and 83 King properties, with the remaining $55.0 million used to repay amounts outstanding under the Company’s prior unsecured revolving facility. The Operating Partnership continues to be the borrower under the new facility, and the Company and all subsidiaries that own unencumbered properties will continue to provide guaranties unless the Company obtains and maintains a credit rating of at least BBB- from S&P or Baa3 from Moody’s, in which case such guaranties are not required except under limited circumstances. Subject to the satisfaction of certain conditions and lender commitments, the Company may increase the availability of either or both of the unsecured revolving credit facility or term loan facility so long as the aggregate commitments under both facilities do not exceed $700.0 million. Under the unsecured revolving credit facility, the Company may elect to pay interest at a rate equal to either LIBOR plus 115 to 155 basis points per annum or a specified base rate plus 15 to 55 basis points per annum, depending on the Company’s leverage ratio. Under the term loan facility, the Company may elect to pay interest at a rate equal to either LIBOR plus 130 to 190 basis points per annum or a specified base rate plus 30 to 90 basis points per annum, again depending on the Company’s leverage ratio. If the Company obtains a credit rating for its senior unsecured long term indebtedness, it may make an irrevocable election to change the interest rate for the unsecured revolving credit facility to a rate equal to either LIBOR plus 87.5 to 165 basis points per annum or the specified base rate plus 0 to 65 basis points per annum, and for the term loan facility equal to either LIBOR plus 90 to 190 basis points per annum or the specified base rate plus 0 to 90 basis points per annum, in each case depending on the credit rating. The unsecured revolving credit facility is subject to a facility fee in an amount equal to the Company’s revolving credit commitments (whether or not utilized) multiplied by a rate per annum equal to 20 to 35 basis points, depending on the Company’s leverage ratio, or, if the Company makes the credit rating election, in an amount equal to the aggregate amount of its revolving credit commitments multiplied by a rate per annum equal to 12.5 to 30 basis points, depending upon the credit rating. Unused amounts of the facility are no longer subject to a separate fee. The Company’s ability to borrow under the facility remains subject to ongoing compliance with a number of customary restrictive covenants. In addition to these covenants, the facility also includes certain limitations on dividend payouts and distributions, limits on certain types of investments outside of the Company’s primary business, and other customary affirmative and negative covenants. As of March 31, 2015, the Company was in compliance with its unsecured revolving credit facility’s financial covenants. As of March 31, 2015, we had total borrowing capacity of $300 million under our unsecured revolving credit facility, none of which had been drawn. Repayment Guaranties Sunset Gower and Sunset Bronson Loan In connection with the loan secured by our Sunset Gower and Sunset Bronson properties, we have guaranteed in favor of and promised to pay to the lender 19.5% of the principal payable under the loan in the event the borrower, a wholly-owned entity of our Operating Partnership, does not do so. At March 31, 2015, the outstanding balance was $97.0 million, which results in a maximum guarantee amount for the principal under this loan of $18.9 million. Furthermore, we agreed to guarantee the completion of the construction improvements including tenant improvements, as defined in the agreement, in the event of any default of the borrower. If the borrower fails to complete the remaining required work, the guarantor agrees to perform timely all of the completion obligations, as defined in the agreement. As of the date of this filing, there has been no event of default associated with this loan. Element LA Loan In connection with our Element LA construction loan, we have guaranteed in favor of and promised to pay to the lender 25.0% of the principal, together with all interest and any other sum payable under the loan in the event the borrower, a wholly-owned entity of our Operating Partnership, does not do so. At March 31, 2015, the outstanding balance was $59.8 million, which results in a maximum guarantee amount for the principal under this loan of $14.9 million. Upon the satisfaction of certain conditions, as defined in the repayment guaranty agreement, our liability with respect to the principal under this loan will be reduced to zero, unless certain further events, described in the guarantee occur, in which case our maximum liability as guarantor will be restored to 25.0% of the principal under the loan. Furthermore, we agreed to guarantee the completion of the construction improvements including tenant improvements, as defined in the agreement, in the event of any default of the borrower. If the borrower fails to complete the remaining required work, the guarantor agrees to perform timely all of the completion obligations, as defined in the agreement. As of the date of this filing, there has been no event of default associated with this loan. 275 Brannan Loan In connection with our 275 Brannan loan, we have guaranteed in favor of and promised to pay to the lender 35.0% of the principal under the loan in the event the borrower, a wholly-owned entity of our Operating Partnership, does not do so. At March 31, 2015, the outstanding balance was $15.0 million, which results in a maximum guarantee amount for the principal under this loan of $5.3 million. Furthermore, we agreed to guarantee the completion of the construction improvements including tenant improvements, as defined in the agreement, in the event of any default of the borrower. The borrower has completed the improvements subject to this completion guaranty. This loan was fully repaid on April 10, 2015. 901 Market Loan In connection with our 901 Market Street loan, we have guaranteed in favor of and promised to pay to the lender 35.0% of the principal under the loan in the event the borrower, a wholly-owned entity of our Operating Partnership, does not do so. At March 31, 2015, the outstanding balance was $49.6 million, which results in a maximum guarantee amount for the principal under this loan of $17.4 million. Furthermore, we agreed to guarantee the completion of the construction improvements including tenant improvements, as defined in the agreement, in the event of any default of the borrower. The borrower has completed various of the improvements subject to this completion guaranty. If the borrower fails to complete the remaining required work, the guarantor agrees to perform timely all of the completion obligations, as defined in the agreement. Subsequent to March 31, 2015, we paid down the outstanding loan balance by $19.6 million. As of the date of this filing, there has been no event of default associated with this loan. Other Loans Although the rest of our loans are secured and non-recourse to the Company and the Operating Partnership, the Operating Partnership provides limited customary secured debt guarantees for items such as voluntary bankruptcy, fraud, misapplication of payments and environmental liabilities.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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