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Debt | 12 Months Ended
--- | ---
Dec. 31, 2016
Debt Disclosure [Abstract] |
Debt | Debt Debt consisted of the following as of December 31, 2016 and 2015 (amounts in thousands):
|  |  |  |  | As of December 31, 2016 |
| Principal Balance as of December 31, 2016 |  | Principal Balance as of December 31, 2015 |  | Stated Rate |  | Effective Rate(1) |  | Maturity Date(2) |
Mortgage debt collateralized by: |  |  |  |  |  |  |  |  |  |
Fixed rate mortgage debt |  |  |  |  |  |  |  |  |  |
10 Bank Street | $ | 31,544 |  |  | $ | 32,214 |  |  | 5.72 | % |  | 6.22 | % |  | 6/1/2017 |
1542 Third Avenue | 17,795 |  |  | 18,222 |  |  | 5.90 | % |  | 6.62 | % |  | 6/1/2017 |
First Stamford Place | 235,067 |  |  | 238,765 |  |  | 5.65 | % |  | 6.18 | % |  | 7/5/2017 |
1010 Third Avenue and 77 West 55th Street | 26,502 |  |  | 27,064 |  |  | 5.69 | % |  | 6.39 | % |  | 7/5/2017 |
383 Main Avenue | 28,654 |  |  | 29,269 |  |  | 5.59 | % |  | 6.04 | % |  | 7/5/2017 |
1333 Broadway | 67,656 |  |  | 68,646 |  |  | 6.32 | % |  | 3.75 | % |  | 1/5/2018 |
1400 Broadway |  |  |  |  |  |  |  |  |  |
(first lien mortgage loan) | 67,714 |  |  | 68,732 |  |  | 6.12 | % |  | 3.41 | % |  | 2/5/2018 |
(second lien mortgage loan) | 9,389 |  |  | 9,600 |  |  | 3.35 | % |  | 3.36 | % |  | 2/5/2018 |
112 West 34th Street |  |  |  |  |  |  |  |  |  |
(first lien mortgage loan) | 75,261 |  |  | 76,406 |  |  | 6.01 | % |  | 3.38 | % |  | 4/5/2018 |
(second lien mortgage loan) | 9,509 |  |  | 9,640 |  |  | 6.56 | % |  | 3.68 | % |  | 4/5/2018 |
1350 Broadway | 37,764 |  |  | 38,348 |  |  | 5.87 | % |  | 3.74 | % |  | 4/5/2018 |
Metro Center | 95,985 |  |  | 97,950 |  |  | 3.59 | % |  | 3.67 | % |  | 11/5/2024 |
10 Union Square(3) | 50,000 |  |  | 20,289 |  |  | 3.70 | % |  | 3.99 | % |  | 4/1/2026 |
Total mortgage debt | 752,840 |  |  | 735,145 |  |  |  |  |  |  |  |
Senior unsecured notes - exchangeable | 250,000 |  |  | 250,000 |  |  | 2.63 | % |  | 3.93 | % |  | 8/15/2019 |
Senior unsecured notes payable: |  |  |  |  |  |  |  |  |  |
Series A | 100,000 |  |  | 100,000 |  |  | 3.93 | % |  | 4.03 | % |  | 3/27/2025 |
Series B | 125,000 |  |  | 125,000 |  |  | 4.09 | % |  | 4.19 | % |  | 3/27/2027 |
Series C | 125,000 |  |  | 125,000 |  |  | 4.18 | % |  | 4.28 | % |  | 3/27/2030 |
Unsecured revolving credit facility | — |  |  | 40,000 |  |  | (4) |  | (4) |  | 1/23/2019 |
Unsecured term loan facility | 265,000 |  |  | 265,000 |  |  | (5) |  | (5) |  | 8/24/2022 |
Total principal | 1,617,840 |  |  | 1,640,145 |  |  |  |  |  |  |  |
Unamortized premiums, net of unamortized discount | 905 |  |  | 5,181 |  |  |  |  |  |  |  |
Deferred financing costs, net | (6,414 | ) |  | (12,910 | ) |  |  |  |  |  |  |
Total | $ | 1,612,331 |  |  | $ | 1,632,416 |  |  |  |  |  |  |  |
______________
(1) | The effective rate is the yield as of December 31, 2016, including the effects of debt issuance costs and the amortization of the fair value of debt adjustment.
(2) | Pre-payment is generally allowed for each loan upon payment of a customary pre-payment penalty.
(3) | The mortgage loan collateralized by 10 Union Square was refinanced in March 2016.
(4) | At December 31, 2016, the unsecured revolving credit facility bears a floating rate at 30 day LIBOR plus 1.15%. The rate at December 31, 2016 was 1.92%.
(5) | The unsecured term loan facility bears a floating rate at 30 day LIBOR plus 1.60%. The rate at December 31, 2016 was 2.37%. Pursuant to a forward interest rate swap agreement, the LIBOR rate is fixed at 2.1485% for the period beginning on August 31, 2017 through maturity.
Principal Payments Aggregate required principal payments at December 31, 2016 are as follows (amounts in thousands):
Year | Amortization |  | Maturities |  | Total
2017 | $ | 9,904 |  |  | $ | 336,009 |  |  | $ | 345,913 |
2018 | 2,880 |  |  | 262,210 |  |  | 265,090 |
2019 | 2,188 |  |  | 250,000 |  |  | 252,188 |
2020 | 2,268 |  |  | — |  |  | 2,268 |
2021 | 2,350 |  |  | — |  |  | 2,350 |
Thereafter | 7,356 |  |  | 742,675 |  |  | 750,031 |
Total principal maturities | $ | 26,946 |  |  | $ | 1,590,894 |  |  | $ | 1,617,840 |
Deferred Financing Costs Deferred financing costs, net, consisted of the following at December 31, 2016 and 2015 (amounts in thousands):
| 2016 |  | 2015
Financing costs | $ | 23,145 |  |  | $ | 20,882 |
Less: accumulated amortization | (12,241 | ) |  | (7,972 | )
Total deferred financing costs, net | $ | 10,904 |  |  | $ | 12,910 |
At December 31, 2016, $4.5 million of net deferred financing costs associated with the unsecured revolving credit facility were included in deferred costs, net on the consolidated balance sheet. Amortization expense related to deferred financing costs was $5.0 million, $6.1 million, and $7.6 million, for the years ended December 31, 2016, 2015, and 2014, respectively, and was included in interest expense. Unsecured Revolving Credit Facility On January 23, 2015, we entered into an unsecured revolving credit agreement, which is referred to herein as the “unsecured revolving credit facility,” with Bank of America, Merrill Lynch, Goldman Sachs and the other lenders party thereto. Merrill Lynch acted as joint lead arranger; Bank of America acted as administrative agent; and Goldman Sachs acted as syndication agent and joint lead arranger. The unsecured revolving credit facility is comprised of a revolving credit facility in the maximum original principal amount of $800.0 million. The unsecured revolving credit facility contains an accordion feature that would allow us to increase the maximum aggregate principal amount to $1.25 billion under specified circumstances. On July 6, 2016, we partially exercised the accordion feature and increased our committed borrowing capacity under the unsecured revolving credit facility from $800 million to $1.1 billion. Amounts outstanding under the unsecured revolving credit facility will bear interest at a floating rate equal to, at our election, (x) a Eurodollar rate, plus a spread that we expect will range from 0.875% to 1.600% depending upon our leverage ratio and credit rating; or (y) a base rate, plus a spread that we expect will range from 0.000% to 0.600% depending upon our leverage ratio and credit rating. In addition, the unsecured revolving credit facility permits us to borrow at competitive bid rates determined in accordance with the procedures described in the unsecured revolving credit facility agreement. We paid certain customary fees and expense reimbursements to enter into the unsecured revolving credit facility. The initial maturity of the unsecured revolving credit facility is January 2019. We have the option to extend the initial term of the unsecured revolving credit facility for up to two additional 6-month periods, subject to certain conditions, including the payment of an extension fee equal to 0.075% of the then outstanding commitments under the unsecured revolving credit facility. The unsecured revolving credit facility includes the following financial covenants: (i) maximum leverage ratio of total indebtedness to total asset value of the loan parties and their consolidated subsidiaries will not exceed 60%, (ii) consolidated secured indebtedness will not exceed 40% of total asset value, (iii) tangible net worth will not be less than $745.4 million plus 75% of net equity proceeds received by us (other than proceeds received within ninety (90) days after the redemption, retirement or repurchase of ownership or equity interests in us up to the amount paid by us in connection with such redemption, retirement or repurchase, where, the net effect is that we shall not have increased our net worth as a result of any such proceeds), (iv) adjusted EBITDA (as defined in the unsecured revolving credit facility) to consolidated fixed charges will not be less than 1.50x, (v) the aggregate net operating income with respect to all unencumbered eligible properties to the portion of interest expense attributable to unsecured indebtedness will not be less than 1.75x, (vi) the ratio of total unsecured indebtedness to unencumbered asset value will not exceed 60%, and (vii) consolidated secured recourse indebtedness will not exceed 10% of total asset value (provided, however, this covenant shall not apply at any time after we achieve a debt ratings from at least two of Moody’s, S&P and Fitch, and such debt ratings are Baa3 or better (in the case of a rating by Moody’s) or BBB- or better (in the case of a rating by S&P or Fitch)). The unsecured revolving credit facility contains customary covenants, including limitations on liens, investment, debt, fundamental changes, and transactions with affiliates, and will require certain customary financial reports. The unsecured revolving credit facility contains customary events of default (subject in certain cases to specified cure periods), including but not limited to non-payment, breach of covenants, representations or warranties, cross defaults, bankruptcy or other insolvency events, judgments, ERISA events, invalidity of loan documents, loss of real estate investment trust qualification, and occurrence of a change of control (defined in the definitive documentation for the unsecured credit facility). As of December 31, 2016, we were in compliance with the covenants under the unsecured revolving credit facility. Senior Unsecured Notes Exchangeable Senior Notes During August 2014, we issued $250.0 million principal amount of 2.625% Exchangeable Senior Notes (“2.625% Exchangeable Senior Notes”) due August 15, 2019. In connection with this offering, we received net proceeds of $246.9 million, after deducting the related underwriting discounts and commissions and issuance costs. Interest on the 2.625% Exchangeable Senior Notes will be payable semi-annually in arrears on February 15 and August 15 of each year, beginning February 15, 2015. The 2.625% Exchangeable Senior Notes are senior unsecured obligations and rank equally in right of payment with all of our other senior unsecured indebtedness and effectively subordinated in right of payment to all of our secured indebtedness (to the extent of the value of the collateral securing such indebtedness) and structurally subordinated to all liabilities and preferred equity of our subsidiaries. The 2.625% Exchangeable Senior Notes will mature on August 15, 2019, unless earlier exchanged, redeemed or repurchased. Holders may exchange their Senior Notes at their option at any time prior to the close of business on the business day immediately preceding May 15, 2019 only under the following circumstances: (i) during any calendar quarter beginning after September 30, 2014 (and only during such quarter) if the closing sale price of our Class A common stock is more than 130% of the then current exchange price for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading days ending on the last trading day of the previous calendar quarter; (ii) during the five consecutive business-day period following any five consecutive trading-day period in which the trading price per 1,000 principal amount of the 2.625% Exchangeable Senior Notes for each trading day during such five consecutive trading-day period in which the trading price per 1,000 principal amount of the 2.625% Exchangeable Senior Notes for each trading day during such five trading-day period was less than 98% of the closing sale price of our Class A common stock, for each trading day during such five trading-day period multiplied by the then current exchange rate; (iii) if we call any or all of the 2.625% Exchangeable Senior Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate transactions (significant consolidation, sale, merger, share exchange, fundamental change, etc.). On or after May 15, 2019, and on or prior to the second scheduled trading day immediately preceding the maturity date, holders may exchange their notes without regard to the foregoing conditions. The 2.625% Exchangeable Senior Notes will be exchangeable into cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at our election. We have asserted it is our intent and ability to settle the principal amount of the 2.625% Exchangeable Senior Notes in cash. The initial exchange rate of 2.625% Exchangeable Senior Notes is 51.4059 shares per $1,000 principal amount of notes (equivalent to an initial exchange price of approximately $19.45 per share of Class A common stock), subject to adjustment, as described in the related indenture governing the 2.625% Exchangeable Senior Notes. As of December 31, 2016, the exchange rate of the 2.625% Exchangeable Senior Notes was 51.5600 shares per $1,000 principal amount of notes (equivalent to an initial exchange price of approximately $19.39 per share of Class A common stock), subject to adjustment, as described in the related indenture governing the 2.625% Exchangeable Senior Notes. Following certain corporate transactions which constitute a make-whole fundamental change (defined in the indenture), we will increase the exchange rate for holders who elect to exchange their 2.625% Exchangeable Senior Notes in connection with such make whole fundamental change in certain circumstances. Following certain corporate transactions which constitute a fundamental change, holders may require us to repurchase the 2.625% Exchangeable Senior Notes for cash at a price equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the repurchase date. We have separately accounted for the liability and equity components of the 2.625% Exchangeable Senior Notes by bifurcating gross proceeds between the indebtedness, or liability component, and the embedded conversion option, or the equity component. The bifurcation was done by estimating an effective interest rate as of the date of the issuance for similar notes which do not contain an embedded conversion option. This effective interest rate was estimated to be 3.8% and was used to compute the fair value at the time of issuance for the indebtedness of $236.6 million. The gross proceeds from the issuance of the 2.625% Exchangeable Senior Notes less the initial amount allocated to the indebtedness resulted in a $13.4 million allocation to the embedded conversion option which is included in Equity, net of financing costs, in the consolidated balance sheets as of December 31, 2016 and 2015. The resulting debt discount is being amortized over the five year period in which the 2.625% Exchangeable Senior Notes are expected to be outstanding (that is, through maturity date) as additional non-cash interest expense. As of December 31, 2016 and 2015, the unamortized discount was $7.0 million and $9.7 million, respectively. The additional non-cash interest expense attributable to the 2.625% Exchangeable Senior Notes will increase in subsequent reporting periods through the maturity date as the 2.625% Exchangeable Senior Notes accrete to their par value over the same period. Underwriting discounts and commissions and issuance costs totaled $3.1 million and were allocated to the indebtedness and the embedded conversion option on a pro-rata basis and accounted as debt issuance costs and equity issuance costs, respectively. In this connection, $2.9 million attributable to the indebtedness was recorded as part of deferred costs, to be subsequently amortized using the effective interest method as interest expense over the expected term of the 2.625% Exchangeable Senior Notes, and $0.2 million attributable to the embedded conversion option was recorded as a reduction to Equity in the consolidated balance sheets as of December 31, 2016 and 2015. For the years ended December 31, 2016, 2015 and 2014, total interest expense related to the 2.625% Exchangeable Senior Notes was $9.9 million, $9.9 million and $3.8 million, respectively, consisting of (i) the contractual interest expense of $6.6 million, $6.6 million and $2.5 million, respectively, (ii) the additional non-cash interest expense of $2.7 million, $2.7 million and $1.1 million, respectively, related to the accretion of the debt discount, and (iii) the amortization of deferred financing costs of $0.6 million, $0.6 million and $0.2 million, respectively. Series A, Series B, and Series C Senior Notes During March 2015, we issued and sold an aggregate principal amount of $350 million senior unsecured notes consisting of $100 million of 3.93% Series A Senior Notes due 2025, $125 million of 4.09% Series B Senior Notes due 2027, and $125 million of 4.18% Series C Senior Notes due 2030 (together, the “Series A, B and C Senior Notes”). Interest on the Series A, B and C Senior Notes is payable quarterly. The terms of the Series A, B and C Senior Notes agreement include customary covenants, including limitations on liens, investment, debt, fundamental changes, and transactions with affiliates and will require certain customary financial reports. It also requires compliance with financial ratios consistent with our unsecured revolving credit facility including a maximum leverage ratio, a maximum secured leverage ratio, a minimum amount of tangible net worth, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, a maximum unsecured leverage ratio and a maximum amount of secured recourse indebtedness. As of December 31, 2016, we were in compliance with the covenants under the Series A, B and C Senior Notes. Senior Unsecured Term Loan Facility During August 2015, we entered into a $265.0 million senior unsecured term loan facility, which is referred to herein as the “term loan facility” with Wells Fargo Bank, National Association, as administrative agent, Capital One, National Association, as syndication agent, PNC Bank, National Association, as documentation agent, and the lenders from time to time party thereto. Amounts outstanding under the term loan facility bear interest at a floating rate equal to, at our election, (x) a LIBOR rate, plus a spread that ranges from 1.400% to 2.350% depending upon our leverage ratio and credit rating; or (y) a base rate, plus a spread that ranges from 0.400% to 1.350% depending upon our leverage ratio and credit rating. Pursuant to a forward interest rate swap agreement, we effectively fixed LIBOR at 2.1485% for $265.0 million of the term loan facility for the period beginning on August 31, 2017 through maturity. In connection with the closing of the term loan facility, we paid certain customary fees and expense reimbursements. The term loan facility matures on August 24, 2022. We may prepay loans under the term loan facility at any time, subject to certain notice requirements. To the extent that we prepay all or any portion of a loan on or prior to August 24, 2017, we will pay a prepayment premium equal to (i) if such prepayment occurs on or prior to August 24, 2016, 2.00% of the principal amount so prepaid, and (ii) if such prepayment occurs after August 24, 2016 but on or prior to August 24, 2017, 1.00% of the principal amount so prepaid. The terms of the term loan facility agreement include customary covenants, including limitations on liens, investment, debt, fundamental changes, and transactions with affiliates and will require certain customary financial reports. The term loan facility requires compliance with financial ratios including a maximum leverage ratio, a maximum secured leverage ratio, a minimum amount of tangible net worth, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, a maximum unsecured leverage ratio and a maximum amount of secured recourse indebtedness. It also contains customary events of default (subject in certain cases to specified cure periods). These terms in the term loan facility agreement are consistent with the terms under our unsecured revolving credit facility agreement. As of December 31, 2016, we were in compliance with the covenants under the term loan facility.

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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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