Debt

3 Months Ended

Mar. 31, 2021

As of March 31, 2021 and December 31, 2020, the Company’s debt consisted of the following:


	March 31, 2021		December 31, 2020		Contractual Interest Rate (1)	Loan Maturity	Effective Interest Rate (2)
HealthSpring Mortgage Loan	$	20,073	$	20,208	4.18%	April 2023	4.62%
Midland Mortgage Loan	97,619		98,155		3.94%	April 2023	4.13%
Emporia Partners Mortgage Loan	1,502		1,627		5.88%	September 2023	5.97%
Samsonite Loan	19,908		20,165		6.08%	September 2023	5.09%
Highway 94 Loan	14,453		14,689		3.75%	August 2024	4.80%
Pepsi Bottling Ventures Loan	18,496		18,587		3.69%	October 2024	3.92%
AIG Loan II	126,241		126,792		4.15%	November 2025	4.92%
BOA Loan	375,000		375,000		3.77%	October 2027	3.91%
BOA/KeyBank Loan	250,000		250,000		4.32%	May 2028	4.14%
AIG Loan	103,383		103,870		4.96%	February 2029	5.08%
Total Mortgage Debt	1,026,675		1,029,093
Revolving Credit Facility (3)	373,500		373,500		LIBO Rate + 1.60%	June 2023	1.84%
2023 Term Loan	200,000		200,000		LIBO Rate + 1.55%	June 2023	1.76%
2024 Term Loan	400,000		400,000		LIBO Rate + 1.55%	April 2024	1.75%
2025 Term Loan	400,000		—		LIBO Rate + 1.55%	December 2025	1.97%
2026 Term Loan	150,000		150,000		LIBO Rate + 1.85%	April 2026	2.02%
Total Debt	2,550,175		2,152,593
Unamortized Deferred Financing Costs and Discounts, net	(11,628)		(12,166)
Total Debt, net	$	2,538,547	$	2,140,427

(1)Including the effect of the interest rate swap agreements with a total notional amount of $750.0 million, the weighted average interest rate as of March 31, 2021 was 3.30% for both the Company’s fixed-rate and variable-rate debt combined and 3.96% for the Company’s fixed-rate debt only.

(2)Reflects the effective interest rate as of March 31, 2021 and includes the effect of amortization of discounts/premiums and deferred financing costs.

(3)The LIBO rate as of March 31, 2021 (effective date) was 0.12%. The Revolving Credit Facility has an initial term of approximately one year, maturing on June 28, 2022, and may be extended for a one-year period if certain conditions are met and upon payment of an extension fee. See discussion below.

Second Amended and Restated Credit Agreement

Pursuant to the Second Amended and Restated Credit Agreement dated as of April 30, 2019 (as amended by the First Amendment to the Second Amended and Restated Credit Agreement dated as of October 1, 2020 and the Second Amendment to the Second Amended and Restated Credit Agreement dated as of December 18, 2020, the “Second Amended and Restated Credit Agreement”), with KeyBank National Association ("KeyBank") as administrative agent, and a syndicate of lenders, we, through the GCEAR Operating Partnership, as the borrower, have been provided with a $1.9 billion credit facility consisting of a $750 million senior unsecured revolving credit facility (the “Revolving Credit Facility”) maturing in June 2022 with (subject to the satisfaction of certain customary conditions) a one-year extension option, a $200 million senior unsecured term loan maturing in June 2023 (the “$200M 5-Year Term Loan”), a $400 million senior unsecured term loan maturing in April 2024 (the “$400M 5-Year Term Loan”), a $400 million senior unsecured term loan maturing in December 2025 (the “$400M 5-Year Term Loan 2025”) (collectively, the “KeyBank Loans”), and a $150 million senior unsecured term loan maturing in April 2026 (the “$150M 7-Year Term Loan”). The credit facility also provides the option, subject to obtaining additional commitments from lenders and certain other customary conditions, to increase the commitments under the Revolving Credit Facility, increase the existing term loans and/or incur new term loans by up to an additional $600 million in the aggregate. As of March 31, 2021, the remaining capacity under the Revolving Credit Facility was $376.5 million.

Based on the terms as of December 31, 2020, the interest rate for the credit facility varies based on the consolidated leverage ratio of the GCEAR Operating Partnership, us, and our subsidiaries and ranges (a) in the case of the Revolving Credit Facility, from LIBOR plus 1.30% to LIBOR plus 2.20%, (b) in the case of each of the $200M 5-Year Term Loan, the $400M 5-Year Term Loan and the $400M 5-Year Term Loan 2025, from LIBOR plus 1.25% to LIBOR plus 2.15% and (c) in the case of the $150M 7-Year Term Loan, from LIBOR plus 1.65% to LIBOR plus 2.50%. If the GCEAR Operating Partnership obtains an investment grade rating of its senior unsecured long term debt from Standard & Poor's Rating Services, Moody's Investors Service, Inc., or Fitch, Inc., the applicable LIBOR margin and base rate margin will vary based on such rating and range (i) in the case of the Revolving Credit Facility, from LIBOR plus 0.825% to LIBOR plus 1.55%, (ii) in the case of each of the $200M 5-Year Term Loan, the $400M 5-Year Term Loan and the $400M 5-Year Term Loan 2025, from LIBOR plus 0.90% to LIBOR plus 1.75% and (iii) in the case of the $150M 7-Year Term Loan, from LIBOR plus 1.40% to LIBOR plus 2.35%.

On March 1, 2021, the Company exercised its right to draw on the $400M 5-Year Term Loan 2025 to repay CCIT II's existing debt balance in connection with the CCIT II Merger.

The Second Amended and Restated Credit Agreement provides that the GCEAR Operating Partnership must maintain a pool of unencumbered real properties (each a "Pool Property" and collectively the "Pool Properties") that meet certain requirements contained in the Second Amended and Restated Credit Agreement. The agreement sets forth certain covenants relating to the Pool Properties, including, without limitation, the following:

•there must be no less than 15 Pool Properties at any time;

•no greater than 15% of the aggregate pool value may be contributed by a single Pool Property or tenant;

•no greater than 15% of the aggregate pool value may be contributed by Pool Properties subject to ground leases;

•no greater than 20% of the aggregate pool value may be contributed by Pool Properties which are under development or assets under renovation;

•the minimum aggregate leasing percentage of all Pool Properties must be no less than 90%; and

•other limitations as determined by KeyBank upon further due diligence of the Pool Properties.

Borrowing availability under the Second Amended and Restated Credit Agreement is limited to the lesser of the maximum amount of all loans outstanding that would result in (i) an unsecured leverage ratio of no greater than 60%, or (ii) an unsecured interest coverage ratio of no less than 2.00:1.00.

Guarantors of the KeyBank Loans include the Company, each special purpose entity that owns a Pool Property, and each of the GCEAR Operating Partnership's other subsidiaries which owns a direct or indirect equity interest in a special purpose entity that owns a Pool Property.

In addition to customary representations, warranties, covenants, and indemnities, the KeyBank Loans require the GCEAR Operating Partnership to comply with the following at all times, which will be tested on a quarterly basis:

•a maximum consolidated leverage ratio of 60%, or, the ratio may increase to 65% for up to four consecutive quarters after a material acquisition;

•a minimum consolidated tangible net worth of 75% of the Company's consolidated tangible net worth at closing of the Revolving Credit Facility, or approximately $2.0 billion, plus 75% of net future equity issuances (including GCEAR OP Units ), minus 75% of the amount of any payments used to redeem the Company's stock or GCEAR OP Units, minus any amounts paid for the redemption or retirement of or any accrued return on the preferred equity issued under the preferred equity investment made in EA-1 in August 2018 by SHBNPP Global Professional Investment Type Private Real Estate Trust No. 13 (H);

•upon consummation, if ever, of an initial public offering, a minimum consolidated tangible net worth of 75% of the Company's consolidated tangible net worth at the time of such initial public offering plus 75% of net future equity issuances (including GCEAR OP Units) should the Company publicly list its shares;

•a minimum consolidated fixed charge coverage ratio of not less than 1.50:1.00;

•a maximum total secured debt ratio of not greater than 40%, which ratio will increase by five percentage points for four quarters after closing of a material acquisition that is financed with secured debt;

•a minimum unsecured interest coverage ratio of 2.00:1.00;

•a maximum total secured recourse debt ratio, excluding recourse obligations associated with interest rate hedges, of 10% of our total asset value; and

•aggregate maximum unhedged variable rate debt of not greater than 30% of the Company's total asset value.

Furthermore, the activities of the GCEAR Operating Partnership, the Company, and the Company's subsidiaries must be focused principally on the ownership, development, operation and management of office, industrial, manufacturing, warehouse, distribution or educational properties (or mixed uses thereof) and businesses reasonably related or ancillary thereto.

Debt Covenant Compliance

Pursuant to the terms of the Company's mortgage loans and the KeyBank Loans, the GCEAR Operating Partnership, in consolidation with the Company, is subject to certain loan compliance covenants. The Company was in compliance with all of its debt covenants as of March 31, 2021.