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Debt | 12 Months Ended
--- | ---
Dec. 31, 2021
Debt Disclosure [Abstract] |
Debt | Debt The following table sets forth information with respect to our outstanding indebtedness:
| December 31, 2021 |  | December 31, 2020 |  | Interest Rate(1) |  | Contractual Maturity Date |
UNSECURED AND SECURED DEBT |  |  |  |  |  |  |  |
Unsecured debt |  |  |  |  |  |  |  |
Unsecured revolving credit facility(2)(3) | $ | 125,000 |  |  | $ | — |  |  | LIBOR + 1.05% to 1.50% |  | 12/21/2025 | (4)
Series A notes(5) | 110,000 |  |  | 110,000 |  |  | 4.34% |  | 1/2/2023 |
Series B notes(5) | 259,000 |  |  | 259,000 |  |  | 4.69% |  | 12/16/2025 |
Series C notes(5) | 56,000 |  |  | 56,000 |  |  | 4.79% |  | 12/16/2027 |
Series D notes(6) | 150,000 |  |  | 150,000 |  |  | 3.98% |  | 7/6/2026 |
Series E notes(7) | 50,000 |  |  | 50,000 |  |  | 3.66% |  | 9/15/2023 |
3.95% Registered senior notes | 400,000 |  |  | 400,000 |  |  | 3.95% |  | 11/1/2027 |
4.65% Registered senior notes | 500,000 |  |  | 500,000 |  |  | 4.65% |  | 4/1/2029 |
3.25% Registered senior notes | 400,000 |  |  | 400,000 |  |  | 3.25% |  | 1/15/2030 |
Total unsecured debt | 2,050,000 |  |  | 1,925,000 |  |  |  |  |  |
Secured debt |  |  |  |  |  |  |  |
Hollywood Media Portfolio | 1,100,000 |  |  | 900,000 |  |  | LIBOR + 1.17% |  | 8/9/2023 |
Acquired Hollywood Media Portfolio debt | (209,814) |  |  | (107,814) |  |  | LIBOR + 1.55% |  | 8/9/2023 |
Hollywood Media Portfolio, net(8)(9) | 890,186 |  |  | 792,186 |  |  |  |  |  |
10950 Washington(10) | — |  |  | 25,717 |  |  | 5.32% |  | N/A |
One Westside and 10850 Pico(11) | 241,388 |  |  | 106,073 |  |  | LIBOR + 1.70% |  | 12/18/2023 | (4)
Element LA | 168,000 |  |  | 168,000 |  |  | 4.59% |  | 11/6/2025 |
1918 Eighth(12) | 314,300 |  |  | 314,300 |  |  | LIBOR + 1.30% |  | 12/18/2025 |
Hill7(13) | 101,000 |  |  | 101,000 |  |  | 3.38% |  | 11/6/2028 |
Total secured debt | 1,714,874 |  |  | 1,507,276 |  |  |  |  |  |
Total unsecured and secured debt | 3,764,874 |  |  | 3,432,276 |  |  |  |  |  |
Unamortized deferred financing costs/loan discounts(14) | (30,971) |  |  | (32,784) |  |  |  |  |  |
TOTAL UNSECURED AND SECURED DEBT, NET | $ | 3,733,903 |  |  | $ | 3,399,492 |  |  |  |  |  |
IN-SUBSTANCE DEFEASED DEBT(15) | $ | 128,212 |  |  | $ | 131,707 |  |  | 4.47% |  | 10/1/2022 |
JOINT VENTURE PARTNER DEBT (16) | $ | 66,136 |  |  | $ | 66,136 |  |  | 4.50% |  | 10/9/2028 |
_____________ 1.Interest rate with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed. Interest rates are as of December 31, 2021, which may be different than the interest rates as of December 31, 2020 for corresponding indebtedness. 2.The annual facility fee rate is 0.15% or 0.30% based on the operating partnership’s leverage ratio. The Company has an option to make an irrevocable election to change the interest rate depending on the Company’s credit rating or a specified base rate plus an applicable margin. As of December 31, 2021, no such election had been made and the unsecured revolving credit facility bore interest at LIBOR + 1.20%. 3.The Company has a total capacity of $1.0 billion available under its unsecured revolving credit facility, up to $250.0 million of which can be used for borrowings in pounds sterling or Canadian dollars. 4.The maturity date may be extended twice for an additional six-month term each. 5.The notes pay interest semi-annually on the 16th day of June and December in each year until maturity. 6.The notes pay interest semi-annually on the 6th day of January and July in each year until maturity. 7.The notes pay interest semi-annually on the 15th day of March and September in each year until maturity. 8.The Company owns 51% of the ownership interest in the consolidated joint venture that owns the Hollywood Media Portfolio. The joint venture holds a $1.1 billion mortgage loan secured by the Hollywood Media Portfolio, which has an initial term of two years from the first payment date with three one-year extension options, subject to certain requirements. The effective interest rate on the loan is LIBOR + 1.17% until August 9, 2022, at which time the effective interest rate will decrease to LIBOR + 0.99%. The Company purchased bonds comprising the loan in the amount of $209.8 million. 9.The interest rate on a portion of the outstanding loan balance has been effectively fixed through the use of interest rate swaps under the first payments approach. As of December 31, 2021, the LIBOR component of the interest rate was fixed at 1.76% with respect to $350.0 million and 1.43% with respect to $125.0 million of the loan secured by the Hollywood Media Portfolio, respectively. 10.Monthly debt service includes debt amortization payments based on a 30-year amortization schedule with a balloon payment at maturity. 11.The Company has the ability to draw up to $414.6 million under the construction loan secured by the One Westside and 10850 Pico properties. 12.The Company owns 55% of the ownership interest in the consolidated joint venture that owns the 1918 Eighth property. The full amount of the loan is shown. This loan is interest-only through its term. 13.The Company owns 55% of the ownership interest in the consolidated joint venture that owns the Hill7 property. The full amount of the loan is shown. This loan bears interest only at 3.38% until November 6, 2026, at which time the interest rate will increase and monthly debt service will include principal payments with a balloon payment at maturity. 14.Excludes deferred financing costs related to establishing the Company’s unsecured revolving credit facility, which are reflected in prepaid expenses and other assets, net on the Consolidated Balance Sheets. See Note 2 for details. 15.The Company owns 75% of the ownership interest in the joint venture that owns the One Westside and 10850 Pico properties. The full amount of the loan is shown. Monthly debt service includes debt amortization payments based on a 10-year amortization schedule with a balloon payment at maturity. 16.This amount relates to debt attributable to Allianz U.S. Private REIT LP (“Allianz”), the Company’s partner in the joint venture that owns the Ferry Building property. The maturity date may be extended twice for an additional two-year term each. Current Year Activity During the year ended December 31, 2021, the outstanding borrowings on the unsecured revolving credit facility increased by $125.0 million, net of draws. The Company generally uses the unsecured revolving credit facility to finance the acquisition of properties and businesses, to provide funds for tenant improvements and capital expenditures and to provide for working capital and other corporate purposes. During the year ended December 31, 2021, the Company paid off the mortgage loan secured by its 10950 Washington property that was originally due on March 11, 2022. In December 2021, the operating partnership entered into the Amended and Restated Credit Agreement with various financial institutions. The Amended and Restated Credit Agreement modified the operating partnership’s unsecured revolving credit facility as discussed under the Credit Facility section below. In November 2021, the consolidated joint venture that owns the 1918 Eighth property amended its $314.3 million loan secured by the property. The refinancing resulted in a reduction of the interest rate from LIBOR + 1.70% to LIBOR + 1.30%. In August 2021, the consolidated joint venture that owns the Hollywood Media Portfolio refinanced its previous $900.0 million loan secured by the Hollywood Media Portfolio, which bore interest at a rate of LIBOR + 2.15%, with a $1.1 billion mortgage loan secured by the Hollywood Media Portfolio with an interest rate of LIBOR + 1.17%. In August 2021, the Company also purchased bonds comprising the loan in the amount of $209.8 million and concurrently redeemed bonds comprising the previous loan in the amount of $107.8 million. The refinancing resulted in resulted in a $6.3 million loss on extinguishment of debt recognized on the Consolidated Statements of Operations. Indebtedness The Company presents its financial statements on a consolidated basis. Notwithstanding such presentation, except to the extent expressly indicated, the Company’s separate property-owning subsidiaries are not obligors of or under the debt of their respective affiliates and each property-owning subsidiary’s separate liabilities do not constitute obligations of its respective affiliates. Loan agreements include events of default that the Company believes are usual for loans and transactions of this type. As of the date of this filing, there have been no events of default associated with the Company’s loans. The following table provides information regarding the Company’s future minimum principal payments due on the Company’s debt (before the impact of extension options, if applicable) as of December 31, 2021:
For the Year Ended December 31, | Unsecured and Secured Debt |  | In-Substance Defeased Debt |  | Joint Venture Partner Debt
2022 | $ | — |  |  | $ | 128,212 |  |  | $ | — |
2023 | 1,291,574 |  |  | — |  |  | — |
2024 | — |  |  | — |  |  | — |
2025 | 866,300 |  |  | — |  |  | — |
2026 | 150,000 |  |  | — |  |  | — |
Thereafter | 1,457,000 |  |  | — |  |  | 66,136 |
TOTAL | $ | 3,764,874 |  |  | $ | 128,212 |  |  | $ | 66,136 |
Unsecured Debt Credit Facility The Amended and Restated Credit Agreement increased the operating partnership’s unsecured revolving credit facility capacity to $1.0 billion and extended its maturity date to December 21, 2025 with two six-month extension options. Subject to the satisfaction of certain conditions and lender commitments, the operating partnership may increase the commitments held under the Amended and Restated Credit Agreement up to a total of $2.0 billion either in the form of an increase to an existing unsecured revolving credit facility or a new loan, including a term loan. The operating partnership continues to be the borrower under its credit facility agreement, and the Company and all subsidiaries that own unencumbered properties will continue to provide guarantees 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 guarantees are not required except under limited circumstances. In October 2019, Moody’s Investors Service upgraded the Company’s long-term corporate credit rating from Baa3 to Baa2, with a stable outlook. Note Purchase Agreements The operating partnership may prepay at any time all or, from time to time, any part of the note purchase agreements in an amount not less than 5% of the aggregate principal amount of any series of note purchase agreements then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid plus a make-whole premium. The operating partnership’s obligations under note purchase agreements are fully and unconditionally guaranteed by the Company. Subsidiaries of the Company will also issue unconditional guarantees upon the occurrence of certain conditions, including such subsidiaries providing guarantees under the Amended and Restated Credit Agreement, by and among the operating partnership, the financial institutions party thereto, and Wells Fargo Bank, National Association as administrative agent. Debt Covenants The operating partnership’s ability to borrow under its unsecured loan arrangements remains subject to ongoing compliance with financial and other covenants as defined in the respective agreements. Certain financial covenant ratios are subject to change in the occurrence of material acquisitions as defined in the respective agreements. Other covenants include certain limitations on dividend payouts and distributions, limits on certain types of investments outside of the operating partnership’s primary business and other customary affirmative and negative covenants. The following table summarizes existing covenants and their covenant levels as of December 31, 2021 related to our unsecured revolving credit facility, term loans and note purchase agreements, when considering the most restrictive terms:
Covenant Ratio |  | Covenant Level |  | Actual Performance
Total liabilities to total asset value |  | ≤ 60% |  | 38.7%
Unsecured indebtedness to unencumbered asset value |  | ≤ 60% |  | 35.2%
Adjusted EBITDA to fixed charges |  | ≥ 1.5x |  | 3.7x
Secured indebtedness to total asset value |  | ≤ 45% |  | 18.3%
Unencumbered NOI to unsecured interest expense |  | ≥ 2.0x |  | 3.6x
The following table summarizes existing covenants and their covenant levels related to our registered senior notes as of December 31, 2021:
Covenant Ratio(1) |  | Covenant Level |  | Actual Performance
Debt to total assets |  | ≤ 60% |  | 42.4%
Total unencumbered assets to unsecured debt |  | ≥ 150% |  | 280.0%
Consolidated income available for debt service to annual debt service charge |  | ≥ 1.5x |  | 4.5x
Secured debt to total assets |  | ≤ 45% |  | 19.9%
_________________ 1.The covenant and actual performance metrics above represent terms and definitions reflected in the indentures governing the 3.25% Senior Notes, 3.95% Senior Notes and 4.65% Senior Notes. The operating partnership was in compliance with its financial covenants as of December 31, 2021. Repayment Guarantees Although the rest of the operating partnership’s loans are secured and non-recourse, the operating partnership provides limited customary secured debt guarantees for items such as voluntary bankruptcy, fraud, misapplication of payments and environmental liabilities. The Company guarantees the operating partnership’s unsecured debt. Interest Expense The following table represents a reconciliation from gross interest expense to the interest expense on the Consolidated Statements of Operations:
|  | Year Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Gross interest expense(1) |  | $ | 134,071 |  |  | $ | 126,447 |  |  | $ | 115,845 |
Capitalized interest |  | (22,595) |  |  | (19,509) |  |  | (16,258) |
Amortization of deferred financing costs and loan discount, net |  | 10,463 |  |  | 6,885 |  |  | 5,514 |
INTEREST EXPENSE |  | $ | 121,939 |  |  | $ | 113,823 |  |  | $ | 105,101 |
_________________ 1.Includes interest on the Company’s debt and hedging activities.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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