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Debt | 6 Months Ended
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Jun. 30, 2024
Debt Disclosure [Abstract] |
Debt | 14. Debt Senior Unsecured Notes On June 28, 2024, the Company completed the issuance of $60.0 million in aggregate principal amount of its 9.125% Senior Notes in an underwritten public offering. The total net proceeds to the Company from the offering of the 9.125% Senior Notes, after deducting the underwriters' discount and commissions and estimated offering expenses, were approximately $57.5 million. On April 27, 2021, the Company completed the issuance and sale to various qualified institutional investors of $100.0 million aggregate principal amount of its unregistered 5.75% Senior Notes due 2026 (the "Unregistered Notes") in a private placement offering at 100% of the principal amount. The net proceeds to the Company from the sale of the Unregistered Notes, after deducting offering expenses, were approximately $96.3 million. Subsequent to the issuance of the Unregistered Notes, the Company conducted an exchange offer wherein the Company exchanged its registered 5.75% Senior Notes due 2026 (the "Registered Notes" and, together with the aggregate principal amount of Unregistered Notes that remain outstanding, the "5.75% Senior Notes") for an equal principal amount of Unregistered Notes. The 9.125% Senior Notes and the 5.75% Senior Notes (collectively, the "Senior Unsecured Notes") are senior unsecured obligations of the Company that are equal in right of payment to each other and structurally subordinated in right of payment to the Company's subordinated debentures. No sinking fund is provided for the Senior Unsecured Notes. The following table presents a summary of the Senior Unsecured Notes as of June 30, 2024 and December 31, 2023, respectively (dollar amounts in thousands):
|  | June 30, 2024 |  | December 31, 2023
|  | Outstanding Face Amount |  | Carrying Value |  | Outstanding Face Amount |  | Carrying Value
9.125% Senior Notes at fair value |  | $ | 60,000 |  |  | $ | 60,000 |  |  | $ | — |  |  | $ | — |
5.75% Senior Notes at amortized cost, net |  | 100,000 |  |  | 98,492 |  |  | 100,000 |  |  | 98,111 |
Total Senior Unsecured Notes |  | $ | 160,000 |  |  | $ | 158,492 |  |  | $ | 100,000 |  |  | $ | 98,111 |
9.125% Senior Notes The 9.125% Senior Notes bear interest at a rate equal to 9.125% per year, payable in cash quarterly in arrears on January 1, April 1, July 1, and October 1 of each year, beginning on October 1, 2024, and mature on July 1, 2029, unless earlier redeemed. The Company may redeem the 9.125% Senior Notes, in whole or in part, at any time at the Company’s option on or after July 1, 2026, at a redemption price equal to 100% of the outstanding principal amount of the 9.125% Senior Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date. The Company has elected the fair value option with respect to the 9.125% Senior Notes. 5.75% Senior Notes As of June 30, 2024, the Company had $100.0 million aggregate principal amount of its 5.75% Senior Notes outstanding. Costs related to the issuance of the 5.75% Senior Notes which include underwriting, legal, accounting and other fees, are reflected as deferred charges. The deferred charges, net of amortization, are presented as a deduction from the corresponding debt liability on the Company's accompanying condensed consolidated balance sheets in the amount of $1.5 million and $1.9 million as of June 30, 2024 and December 31, 2023, respectively. The deferred charges are amortized as an adjustment to interest expense using the effective interest method, resulting in a total cost to the Company of approximately 6.64%. The 5.75% Senior Notes bear interest at a rate of 5.75% per year, subject to adjustment from time to time based on changes in the ratings of the 5.75% Senior Notes by one or more nationally recognized statistical rating organizations (a “NRSRO”). The annual interest rate on the 5.75% Senior Notes will increase by (i) 0.50% per year beginning on the first day of any six-month interest period if as of such day the 5.75% Senior Notes have a rating of BB+ or below and above B+ from any NRSRO and (ii) 0.75% per year beginning on the first day of any six-month interest period if as of such day the 5.75% Senior Notes have a rating of B+ or below or no rating from any NRSRO. Interest on the 5.75% Senior Notes is paid semi-annually in arrears on April 30 and October 30 of each year, and the 5.75% Senior Notes will mature on April 30, 2026. The Company had the right to redeem the 5.75% Senior Notes, in whole or in part, at any time prior to April 30, 2023 at a redemption price equal to 100% of the principal amount of the 5.75% Senior Notes to be redeemed, plus the applicable "make-whole" premium, plus accrued but unpaid interest, if any, to, but excluding, the redemption date. The "make-whole" premium was equal to the present value of all interest that would have accrued between the redemption date and up to, but excluding, April 30, 2023, plus an amount equal to the principal amount of such 5.75% Senior Notes multiplied by 2.875%. After April 30, 2023, the Company has the right to redeem the 5.75% Senior Notes, in whole or in part, at 100% of the principal amount of the 5.75% Senior Notes to be redeemed, plus accrued but unpaid interest, if any, to, but excluding, the redemption date, plus an amount equal to the principal amount of such 5.75% Senior Notes multiplied by a date-dependent multiple as detailed in the following table:
Redemption Period |  | Multiple
April 30, 2023 - April 29, 2024 |  | 2.875 | %
April 30, 2024 - April 29, 2025 |  | 1.4375 | %
April 30, 2025 - April 29, 2026 |  | — |
As of June 30, 2024, the Company's 5.75% Senior Notes contain various covenants including the maintenance of a minimum net asset value, ratio of unencumbered assets to unsecured indebtedness and senior debt service coverage ratio and limit the amount of leverage the Company may utilize and its ability to transfer the Company’s assets substantially as an entirety or merge into or consolidate with another person. The Company is in compliance with such covenants as of June 30, 2024 and through the date of this Quarterly Report on Form 10-Q. Subordinated Debentures Subordinated debentures are trust preferred securities that are fully guaranteed by the Company with respect to distributions and amounts payable upon liquidation, redemption or repayment. Prior to July 2023, each of the Company's subordinated debentures incurred interest at a floating rate equal to three-month LIBOR plus an applicable spread, resetting quarterly. In light of the cessation of the publication of three-month LIBOR after June 30, 2023, and pursuant to the terms of each of the Company's subordinated debentures, as of June 30, 2024, the floating rate for each of the Company's subordinated debentures is equal to three-month CME Term SOFR plus both a tenor spread adjustment of 0.26161% per annum and the applicable spread. The following table summarizes the key details of the Company’s subordinated debentures as of June 30, 2024 and December 31, 2023 (dollar amounts in thousands):
|  | NYM Preferred Trust I |  | NYM Preferred Trust II
Principal value of trust preferred securities |  | $ | 25,000 |  |  | $ | 20,000 |
Interest rate |  | Three-month CME Term SOFR plus tenor spread adjustment of 0.26161% plus 3.75%, resetting quarterly |  | Three-month CME Term SOFR plus tenor spread adjustment of 0.26161% plus 3.95%, resetting quarterly
Scheduled maturity |  | March 30, 2035 |  | October 30, 2035
As of August 2, 2024, the Company has not been notified, and is not aware, of any event of default under the indenture for the subordinated debentures. Mortgages Payable on Real Estate As of June 30, 2024 and December 31, 2023, the Company owned joint venture equity investments in entities that own multi-family apartment communities, which the Company determined to be VIEs and for which the Company is the primary beneficiary. The Company also owned a preferred equity investment in a VIE that owns a multi-family apartment community and for which the Company is the primary beneficiary. Accordingly, the Company consolidated the respective VIEs into its condensed consolidated financial statements (see Note 7). As of June 30, 2024, three joint venture equity investments entered into debt restructuring agreements with the respective senior lender for their mortgage payables. During the three months ended March 31, 2024, one agreement was entered into where the required strike price of the interest rate cap agreement related to the respective mortgage payable increased and a portion of interest payments will be deferred until the maturity date. During the three months ended June 30, 2024, two agreements were entered into where a portion of interest payments will be deferred until the maturity date. The restructurings did not result in a change in the carrying amount of the mortgage payables and no gains were recorded. The consolidated multi-family apartment communities are subject to mortgages payable collateralized by the associated real estate assets. The Company has no obligation for repayment of the mortgages payable but, with respect to certain of the mortgages payable, it may execute a guaranty related to commitment of bad acts. The following table presents detailed information for these mortgages payable on real estate as of June 30, 2024 and December 31, 2023, respectively (dollar amounts in thousands):
| Maximum Committed Mortgage Principal Amount |  | Outstanding Mortgage Balance |  | Net Deferred Finance Cost |  | Mortgage Payable, Net (1) |  | Stated Maturity |  | Weighted Average Interest Rate (2) (3) |  |
June 30, 2024 | $ | 604,625 |  |  | $ | 595,658 |  |  | $ | (2,739) |  |  | $ | 592,919 |  |  | 2025 - 2032 |  | 5.68 | % |  |
December 31, 2023 | 810,047 |  |  | 789,053 |  |  | (4,632) |  |  | 784,421 |  |  | 2024 - 2032 |  | 6.41 | % |  |
(1)In September 2022, the Company announced a repositioning of its business through the opportunistic disposition over time of the Company's joint venture equity investments in multi-family properties and reallocation of its capital away from such assets to its targeted assets. Accordingly, mortgages payable on real estate related to certain joint venture equity investments in multi-family properties are included in liabilities of disposal group held for sale on the accompanying condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023. See Note 9 for additional information. (2)Weighted average interest rate is calculated using the outstanding mortgage balance and interest rate as of the date indicated. (3)For variable-rate mortgages payable, the applicable entities, as required by loan agreements, entered into interest rate cap contracts with counterparties that limit the indexed portion of the interest rate to a fixed rate. See Note 10 for additional information. Debt Maturities As of June 30, 2024, maturities for debt on the Company's condensed consolidated balance sheet are as follows (dollar amounts in thousands):
Year Ending December 31, |  | Outstanding Balance
2024 |  | $ | — |
2025 |  | 181,198 |
2026 |  | 126,434 |
2027 |  | — |
2028 |  | — |
2029 |  | 304,261 |
Thereafter |  | 188,764 |
|  | $ | 800,657 |

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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/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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