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DEBT OBLIGATIONS | 9 Months Ended
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Sep. 30, 2024
Debt Disclosure [Abstract] |
DEBT OBLIGATIONS | 7. DEBT OBLIGATIONS The following table sets forth information regarding the Company’s consolidated debt obligations outstanding as of September 30, 2024 and December 31, 2023 (in thousands):
| September 30, 2024 |  | December 31, 2023 |  | Effective Interest Rate |  | Maturity Date |
SECURED DEBT: |  |  |  |  |  |  |  |
$245.0M 5.88% Secured Term Loan due 2028 | $ | 245,000 |  |  | $ | 245,000 |  |  | 5.88% |  | February 2028 |
$50.0M Construction Loan due 2026 | 29,767 |  |  | 13,824 |  |  | SOFR + 2.50% |  | August 2026 |
Principal balance outstanding | 274,767 |  |  | 258,824 |  |  |  |  |  |
Less: deferred financing costs | (2,586) |  |  | (3,153) |  |  |  |  |  |
Total Secured indebtedness | $ | 272,181 |  |  | $ | 255,671 |  |  |  |  |  |
UNSECURED DEBT |  |  |  |  |  |  |  |
$600.0M Unsecured Credit Facility | $ | 40,000 |  |  | $ | — |  |  | SOFR + 1.50% |  | June 2027 | (a)
Term Loan - Swapped to fixed | 250,000 |  |  | 250,000 |  |  | SOFR + 1.70% | (b) | June 2027 | (a)
$70.0M Term Loan | 70,000 |  |  | 70,000 |  |  | SOFR + 2.00% |  | February 2025 | (a)
$350.0M 4.10% Guaranteed Notes due 2024 | — |  |  | 340,000 |  |  | 3.78% |  | October 2024 |
$450.0M 3.95% Guaranteed Notes due 2027 | 450,000 |  |  | 450,000 |  |  | 4.03% |  | November 2027 |
$350.0M 8.30% Guaranteed Notes due 2028 | 350,000 |  |  | 350,000 |  |  | 8.35% | (c) | March 2028 |
$350.0M 4.55% Guaranteed Notes due 2029 | 350,000 |  |  | 350,000 |  |  | 4.30% |  | October 2029 |
$400.0M 8.875% Guaranteed Notes due 2029 | 400,000 |  |  | — |  |  | 8.97% |  | April 2029 |
Indenture IA (Preferred Trust I) | 27,062 |  |  | 27,062 |  |  | SOFR + 1.51 | (d) | March 2035 |
Indenture IB (Preferred Trust I) | 25,774 |  |  | 25,774 |  |  | SOFR + 1.51 | (d) | April 2035 |
Indenture II (Preferred Trust II) | 25,774 |  |  | 25,774 |  |  | SOFR + 1.51 | (d) | July 2035 |
Note Payable | 13,000 |  |  | — |  |  | 4.66% |  | June 2027 |
Principal balance outstanding | 2,001,610 |  |  | 1,888,610 |  |  |  |  |  |
Plus: original issue premium (discount), net | $ | (663) |  |  | $ | 1,878 |  |  |  |  |  |
Less: deferred financing costs | (11,355) |  |  | (7,327) |  |  |  |  |  |
Total unsecured indebtedness | $ | 1,989,592 |  |  | $ | 1,883,161 |  |  |  |  |  |
Total Debt Obligations | $ | 2,261,773 |  |  | $ | 2,138,832 |  |  |  |  |  |
(a)Spread includes a 10 basis point daily SOFR adjustment. (b)On November 23, 2022, the $250.0 million unsecured term loan was swapped to a fixed rate. At September 30, 2024, the fixed rate for this instrument was 5.41% and matures on June 30, 2027. The effective date of the swap was January 31, 2023. (c)During the third quarter of 2023, Moody’s downgraded the Company's senior unsecured credit rating from Baa3 to Ba1. As a result of the downgrade, the interest rate on the Company's 7.55% Guaranteed Notes due 2028 (the "2028 Notes") increased 25 basis points in September 2023 due to the coupon adjustment provisions within the 2028 Notes. During the first quarter of 2024, S&P downgraded the Company's senior unsecured credit rating from BBB- to BB+. As a result of the downgrade, the interest rate on the 2028 Notes increased 25 basis points to 8.05% in March 2024 due to the coupon adjustment provisions within the 2028 Notes. During the second quarter of 2024, Moody's downgraded the Company's senior unsecured credit rating from Ba1 to Ba2. As a result of the downgrade, the interest rate on the 2028 Notes increased 25 basis points to 8.30% in April 2024 due to the coupon adjustment provisions within the 2028 Notes. (d)On January 16, 2024, the Trust Preferred I Indenture IA was swapped to a fixed rate at 5.14% for the period from March 30, 2024 to December 30, 2026 and Trust Preferred I Indenture IB and Trust Preferred II Indenture II were swapped to a fixed rate at 5.24% for the period from January 30, 2024 to January 30, 2027. The Company utilizes borrowings under its unsecured credit facility (the “Unsecured Credit Facility”) for general business purposes, including to fund costs of acquisitions, developments and redevelopments of properties, and to fund share repurchases and repay other debt. The Unsecured Credit Facility provides for borrowings of up to $600.0 million and the per annum variable interest rate on borrowings is SOFR plus 1.40% plus a spread adjustment of 0.10%. The interest rate and facility fee are subject to adjustment upon a change in the Company’s unsecured debt ratings. During the nine months ended September 30, 2024, the weighted-average interest rate on Unsecured Credit Facility borrowings was 6.90%, resulting in $1.4 million of interest expense for such period. Guaranteed Notes due 2029 O n April 12, 2024, th e Company completed an underwritten offering of $400.0 million aggregate principal amount of its 8.875% Guaranteed Notes due 2029 (the “2029 Notes”). The 2029 Notes were priced at approximately 99.51% of their face amount. The Company received approximately $391.8 million of net proceeds after the deduction for underwriting discounts and offering expenses. On April 15, 2024, the Company commenced a tender offer (the “Tender Offer”) for any and all of the outstanding $335.1 million principal amount of its 4.10% Guaranteed Notes due 2024 (the “2024 Notes”). The purchase price offered per $1,000 principal amount of 2024 Notes pursuant to the Tender Offer was determined by reference to the fixed spread for the 2024 Notes of 0 basis points plus the yield based on the bid-side price of the 4.250% U.S. Treasury due September 30, 2024. The Tender Offer expired on April 19, 2024. Upon completion of the Tender Offer, on April 23, 2024, the Company issued a redemption notice to redeem any 2024 Notes that remained outstanding after the Tender Offer. On June 7, 2024, the Company redeemed the $113.4 million principal amount of the 2024 Notes at the aggregate principal amount outstanding together with accrued and unpaid interest thereon to the redemption date. Additional Information on Unsecured and Secured Consolidated Debt The Parent Company unconditionally guarantees the unsecured debt obligations of the Operating Partnership (or is a co-borrower with the Operating Partnership) but does not by itself incur unsecured indebtedness. The Parent Company has no material assets other than its investment in the Operating Partnership. The Company was in compliance with all financial covenants as of September 30, 2024. Certain of the covenants restrict the Company’s ability to obtain alternative sources of capital. As of September 30, 2024, the aggregate scheduled principal payments on the Company’s consolidated debt obligations (secured and unsecured) were as follows (in thousands):
2024 (three months remaining) | $ | — |
2025 | 70,000 |
2026 | 29,767 |
2027 | 753,000 |
2028 | 595,000 |
Thereafter | 828,610 |
Total principal payments | 2,276,377 |
Net unamortized premiums/(discounts) | (663) |
Net deferred financing costs | (13,941) |
Outstanding indebtedness | $ | 2,261,773 |

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