XML 29 R13.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Mortgage Notes Payable and Credit Facility | 12 Months Ended
--- | ---
Dec. 31, 2023
Debt Disclosure [Abstract] |
Mortgage Notes Payable and Credit Facility | Mortgage Notes Payable and Credit Facility Our $125.0 million unsecured revolving credit facility (“Revolver”), $160.0 million term loan facility (“Term Loan A”), $60.0 million term loan facility (“Term Loan B”), and $150.0 million term loan facility (“Term Loan C”) are collectively referred to herein as the Credit Facility. Our mortgage notes payable and Credit Facility as of December 31, 2023 and December 31, 2022 are summarized below (dollars in thousands):
|  | Encumbered properties at |  | Carrying Value at |  | Stated Interest Rates at |  | Scheduled Maturity Dates at
|  | December 31, 2023 |  | December 31, 2023 |  | December 31, 2022 |  | December 31, 2023 |  | December 31, 2023
Mortgage and other secured loans: |  |  |  |  |  |  |  |  |  |
Fixed rate mortgage loans |  | 47 |  |  | $ | 298,122 |  |  | $ | 362,037 |  |  | (1) |  | (2)
Premiums and discounts, net |  | — |  |  | (42) |  |  | (83) |  |  | N/A |  | N/A
Deferred financing costs, mortgage loans, net |  | — |  |  | (2,227) |  |  | (2,565) |  |  | N/A |  | N/A
Total mortgage notes payable, net |  | 47 |  |  | $ | 295,853 |  |  | $ | 359,389 |  |  | (3) |  |
Variable rate revolving credit facility |  | 85 |  | (6) | $ | 75,750 |  |  | $ | 23,250 |  |  | SOFR + 1.50% | (4) | 8/18/2026
Total revolver |  | 85 |  |  | $ | 75,750 |  |  | $ | 23,250 |  |  |  |  |
Variable rate term loan facility A |  | — |  |  | 160,000 |  |  | 160,000 |  |  | SOFR + 1.45% | (4) | 8/18/2027
Variable rate term loan facility B |  | — |  |  | 60,000 |  |  | 60,000 |  |  | SOFR + 1.45% | (4) | 2/11/2026
Variable rate term loan facility C |  | — |  |  | 150,000 |  |  | 150,000 |  |  | SOFR + 1.45% | (4) | 2/18/2028
Deferred financing costs, term loan facility |  | — |  |  | (2,742) |  |  | (3,433) |  |  | N/A |  | N/A
Total term loan, net |  | N/A |  | $ | 367,258 |  |  | $ | 366,567 |  |  |  |  |
Total mortgage notes payable and credit facility |  | 132 |  |  | $ | 738,861 |  |  | $ | 749,206 |  |  | (5) |  |
(1)Interest rates on our fixed rate mortgage notes payable vary from 2.80% to 6.63%. (2)We have 41 mortgage notes payable with maturity dates ranging from June 18, 2024 through August 1, 2037. (3)The weighted average interest rate on the mortgage notes outstanding at December 31, 2023, was approximately 4.19%. (4)As of December 31, 2023, SOFR was approximately 5.38%. (5)The weighted average interest rate on all debt outstanding at December 31, 2023, was approximately 5.78%. (6)The amount we may draw under our Credit Facility is based on a percentage of the fair value of a combined pool of 85 unencumbered properties as of December 31, 2023. N/A - Not Applicable Mortgage Notes Payable As of December 31, 2023, we had 41 mortgage notes payable, collateralized by a total of 47 properties with a net book value of $480.2 million. We have limited recourse liabilities that could result from any one or more of the following circumstances: a borrower voluntarily filing for bankruptcy, improper conveyance of a property, fraud or material misrepresentation, misapplication or misappropriation of rents, security deposits, insurance proceeds or condemnation proceeds, or physical waste or damage to the property resulting from a borrower’s gross negligence or willful misconduct. As of December 31, 2023, we did not have any recourse mortgages. We will also indemnify lenders against claims resulting from the presence of hazardous substances or activity involving hazardous substances in violation of environmental laws on a property. During the year ended December 31, 2023, we repaid six mortgages collateralized by six properties, which are summarized below (dollars in thousands):
Fixed Rate Debt Repaid |  | Interest Rate on Fixed Rate Debt Repaid
$ | 58,864 |  |  | 4.69 | %
During the year ended December 31, 2023, we issued three mortgages, collateralized by three properties, which are summarized below (dollars in thousands):
Aggregate Fixed Rate Debt Issued |  | Weighted Average Interest Rate on Fixed Rate Debt |  |  |
$ | 9,000 |  |  | 6.10 | % |  |  |
During the year ended December 31, 2023, we extended the maturity date of one mortgage, collateralized by one property, which is summarized in the table below (dollars in thousands):
Fixed Rate Debt Extended |  | Interest Rate on Fixed Rate Debt Extended |  | Extension Term
$ | 8,769 |  |  | 6.50 | % |  | 1.0 year
Scheduled principal payments of mortgage notes payable for each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands):
Year |  | Scheduled Principal Payments |
2024 |  | $ | 25,079 |  |
2025 |  | 36,457 |  |
2026 |  | 35,087 |  |
2027 |  | 95,039 |  |
2028 |  | 37,115 |  |
Thereafter |  | 69,345 |  |
|  | $ | 298,122 |  | (1)
(1)This figure does not include $(0.04) million premiums and (discounts), net, and $2.2 million of deferred financing costs, which are reflected in mortgage notes payable on the consolidated balance sheets. We believe we will be able to address all mortgage notes payable maturing over the next 12 months through a combination of refinancing our existing indebtedness, cash from operations, proceeds from one or more equity offerings and availability on our Credit Facility. Interest Rate Caps and Swaps We have entered into interest rate cap agreements that cap the interest rate on certain of our variable-rate debt and we have assumed or entered into interest rate swap agreements in which we hedged our exposure to variable interest rates by agreeing to pay fixed interest rates to our respective counterparty. We have adopted the fair value measurement provisions for our financial instruments recorded at fair value. The fair value guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Generally, we will estimate the fair value of our interest rate caps and interest rate swaps, in the absence of observable market data, using estimates of value including estimated remaining life, counterparty credit risk, current market yield and interest rate spreads of similar securities as of the measurement date. At December 31, 2023 and 2022, our interest rate cap and interest rate swap agreements were valued using Level 2 inputs. The fair value of the interest rate cap agreements is recorded in other assets on our accompanying consolidated balance sheets. We record changes in the fair value of the interest rate cap agreements quarterly based on the current market valuations at quarter end. If the interest rate cap qualifies for hedge accounting, the change in the estimated fair value is recorded to accumulated other comprehensive income to the extent that it is effective, with any ineffective portion recorded to interest expense in our consolidated statements of operations and comprehensive income. If the interest rate cap does not qualify for hedge accounting, or if it is determined the hedge is ineffective, any change in the fair value is recognized in interest expense in our consolidated statements of operations and comprehensive income. During the next 12 months, we estimate that an additional $4.3 million will be reclassified out of accumulated other comprehensive income into interest expense in our consolidated statements of operations and comprehensive income, as a reduction to interest expense. The following table summarizes the interest rate caps at December 31, 2023 and 2022 (dollars in thousands):
|  | December 31, 2023 |  | December 31, 2022
Aggregate Cost |  | Aggregate Notional Amount |  | Aggregate Fair Value |  | Aggregate Notional Amount |  | Aggregate Fair Value
$ | 141 |  | (1) | $ | 65,000 |  |  | $ | 684 |  |  | $ | 225,000 |  |  | $ | 4,629 |
(1)We have entered into various interest rate cap agreements on new variable rate debt with SOFR caps ranging from 1.49% to 1.75%. We have entered into interest rate swap agreements in connection with certain of our acquisitions, whereby we will pay our counterparty a fixed interest rate on a monthly basis, and receive payments from our counterparty equivalent to the stipulated floating rate. The fair value of our interest rate swap agreements are recorded in other liabilities on our accompanying consolidated balance sheets. We have designated our interest rate swaps as cash flow hedges, and we record changes in the fair value of the respective interest rate swap agreement to accumulated other comprehensive income on the consolidated balance sheets. We record changes in fair value on a quarterly basis, using current market valuations at quarter end. The following table summarizes our interest rate swaps at December 31, 2023 and 2022 (dollars in thousands):
December 31, 2023 |  | December 31, 2022
Aggregate Notional Amount |  | Aggregate Fair Value Asset |  | Aggregate Fair Value Liability |  | Aggregate Notional Amount |  | Aggregate Fair Value Asset |  | Aggregate Fair Value Liability
$ | 361,676 |  |  | $ | 6,222 |  |  | $ | (670) |  |  | $ | 362,832 |  |  | $ | 8,264 |  |  | $ | (897) |
The following tables present the impact of our derivative instruments in the consolidated financial statements (dollars in thousands):
|  | Amount of gain, net, recognized in Comprehensive Income
|  | 2023 |  | 2022 |  | 2021
Derivatives in cash flow hedging relationships |  |  |  |  |  |
Interest rate caps |  | $ | (3,038) |  |  | $ | 4,301 |  |  | $ | 174 |
Interest rate swaps |  | (1,815) |  |  | 7,814 |  |  | 2,680 |
Total |  | $ | (4,853) |  |  | $ | 12,115 |  |  | $ | 2,854 |
The following table presents the reclassifications of our derivative instruments out of accumulated other comprehensive income into interest expense in the consolidated financial statements (dollars in thousands):
|  | Amount reclassified out of Accumulated Other Comprehensive Income
|  | 2023 |  | 2022 |  | 2021
Derivatives in cash flow hedging relationships |  |  |  |  |  |
Interest rate caps |  | $ | (971) |  |  | $ | (871) |  |  | $ | (145) |
Total |  | $ | (971) |  |  | $ | (871) |  |  | $ | (145) |
The following table sets forth certain information regarding our derivative instruments (dollars in thousands):
|  |  |  | Asset (Liability) Derivatives Fair Value at
Derivatives Designated as Hedging Instruments |  | Balance Sheet Location |  | December 31, 2023 |  | December 31, 2022
Interest rate caps |  | Other assets |  | $ | 684 |  |  | $ | 4,629 |
Interest rate swaps |  | Other assets |  | 6,222 |  |  | 8,264 |
Interest rate swaps |  | Other liabilities |  | (670) |  |  | (897) |
Total derivative liabilities, net |  |  |  | $ | 6,236 |  |  | $ | 11,996 |
The fair value of all mortgage notes payable outstanding as of December 31, 2023 was $263.3 million, as compared to the carrying value stated above of $295.9 million. The fair value is calculated based on a discounted cash flow analysis, using management’s estimate of market interest rates on long-term debt with comparable terms and loan to value ratios. The fair value was calculated using Level 3 inputs of the hierarchy established by ASC 820, “Fair Value Measurements and Disclosures.” Credit Facility On August 7, 2013, we procured our $60.0 million Revolver with KeyBank National Association (“KeyBank”) (serving as revolving lender, a letter of credit issuer and an administrative agent). In October 2015, we expanded our Revolver to $85.0 million and entered into Term Loan A whereby we added a $25.0 million, five-year Term Loan subject to the same leverage tiers as the Revolver, with the interest rate at each leverage tier being five basis points lower than that of the Revolver. We have the option to repay Term Loan A in full, or in part, at any time without penalty or premium prior to the maturity date. On October 27, 2017, we amended this Credit Facility, increasing Term Loan A from $25.0 million, to $75.0 million, with the Revolver commitment remaining at $85.0 million. Term Loan A’s maturity date was extended to October 27, 2022, and the Revolver maturity date was extended to October 27, 2021. In connection with the amendment, the interest rate for the Credit Facility was reduced by 25 basis points at each of the leverage tiers. At the time of amendment, we entered into multiple interest rate cap agreements on Term Loan A, which cap LIBOR at 2.75% to hedge our exposure to variable interest rates. On July 2, 2019, we amended, extended and upsized our Credit Facility, expanding Term Loan A from $75.0 million to $160.0 million, inclusive of a delayed draw component whereby we can incrementally borrow on the Term Loan up to the $160.0 million commitment, and increasing the Revolver from $85.0 million to $100.0 million. Term Loan A has a new five-year term, with a maturity date of July 2, 2024, and the Revolver has a new four-year term, with a maturity date of July 2, 2023. The interest rate margin for the Credit Facility was reduced by 10 basis points at each of the leverage tiers. We entered into multiple interest rate cap agreements on Term Loan A, which cap LIBOR ranging from 2.50% to 2.75%, to hedge our exposure to variable interest rates. We used the net proceeds derived from the amended Credit Facility to repay all previously existing borrowings under the Revolver. We incurred fees of approximately $1.3 million in connection with the Credit Facility amendment. The bank syndicate for the Credit Facility is now comprised of KeyBank, Fifth Third Bank, U.S. Bank National Association, The Huntington National Bank, Goldman Sachs Bank USA, and Wells Fargo Bank, National Association. On February 11, 2021, we added a new $65.0 million Term Loan B, inclusive of a $15.0 million delayed funding component, which was funded on July 20, 2021. Term Loan B has a maturity date of February 11, 2026 and a LIBOR floor of 25 basis points, plus a spread ranging from 140 to 225 basis points, depending on leverage. We entered into multiple interest rate cap agreements on Term Loan B, which cap LIBOR from 1.50% to 1.75%. We incurred fees of approximately $0.5 million in connection with issuing Term Loan B. As of December 31, 2023, there was $60.0 million outstanding under Term Loan B. On August 18, 2022, we amended, extended and upsized our Credit Facility, increasing our Revolver from $100.0 million to $120.0 million (and its term to August 2026), adding the new $140.0 million Term Loan C, decreasing the principal balance of Term Loan B to $60.0 million and extending the maturity date of Term Loan A to August 2027. Term Loan C has a maturity date of February 18, 2028 and a SOFR spread ranging from 125 to 195 basis points, depending on our leverage. On September 27, 2022 we further increased the Revolver to $125.0 million and Term Loan C to $150.0 million, as permitted under the terms of the Credit Facility. We entered into multiple interest rate swap agreements on Term Loan C, which swap the interest rate to fixed rates ranging from 3.15% to 3.75%. We also entered into an interest rate swap agreement on Term Loan A to replace the expiring rate caps, which swaps the interest rate to a fixed rate of 3.70%. We incurred fees of approximately $4.2 million in connection with extending and upsizing our Credit Facility. The net proceeds of the transaction were used to repay the then-outstanding borrowings on the Revolver, pay off mortgage debt, and fund acquisitions. The Credit Facility’s current bank syndicate is comprised of KeyBank, Fifth Third Bank, The Huntington National Bank, Bank of America, Synovus Bank, United Bank, First Financial Bank, and S&T Bank. As of December 31, 2023, there was $445.8 million outstanding under our Credit Facility, at a weighted average interest rate of approximately 6.84% and $2.0 million outstanding under letters of credit, at a weighted average interest rate of 1.50%. As of December 31, 2023, the maximum additional amount we could draw under the Credit Facility was $44.5 million. We were in compliance with all covenants under the Credit Facility as of December 31, 2023. The amount outstanding under the Credit Facility approximates fair value as of December 31, 2023.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//470/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration