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Debt Obligations

6 Months Ended

Jun. 30, 2020

Debt Obligations

Debt Obligations

Note 8 – Debt Obligations

Mortgages Payable

The following table details the Mortgages payable, net, balances per the consolidated balance sheets (amounts in thousands):


		June 30,			December 31,
		2020			2019
Mortgages payable, gross		$	448,692		$	440,278
Unamortized deferred financing costs			(4,255)			(4,438)
Mortgages payable, net		$	444,437		$	435,840

Line of Credit

The Company has a credit facility with Manufacturers & Traders Trust Company, People’s United Bank, VNB New York, LLC, and Bank Leumi USA, pursuant to which it may borrow up to $100,000,000, subject to borrowing base requirements. The facility is available for the acquisition of commercial real estate, repayment of mortgage debt, and renovation and operating expense purposes; provided, that if used for renovation and operating expense purposes, the amount outstanding for such purposes will not exceed the lesser of $30,000,000 and 30% of the borrowing base subject to a cap of (i) $10,000,000 for operating expense purposes, which has been drawn down and (ii) $20,000,000 for renovation expenses. The facility, which matures December 31, 2022, provides for an interest rate equal to the one month LIBOR rate plus an applicable margin ranging from 175 basis points to 300 basis points depending on the ratio of the Company’s total debt to total value, as determined pursuant to the facility. The applicable margin was 200 basis points at June 30, 2020 and 2019. An unused facility fee of .25% per annum applies to the facility. The average interest rate on the facility was approximately 2.86% and 4.22% for the six months ended June 30, 2020 and 2019, respectively. The Company was in compliance with all covenants at June 30, 2020.

Note 8 – Debt Obligations (Continued)

Effective as of July 8, 2020, the credit facility was amended to (i) increase, from $10,000,000 to $20,000,000, the amount the Company can borrow for operating expense purposes and (ii) decrease, from $20,000,000 to $10,000,000, the amount it can borrow for renovation purposes. These changes are effective through February 28, 2021, at which time the amount the Company can borrow for these purposes resets to the thresholds in effect prior to this amendment. To the extent that as of March 1, 2021 more than $10,000,000 is outstanding for operating expense purposes, such excess must be repaid immediately.

The following table details the Line of credit, net, balances per the consolidated balance sheets (amounts in thousands):


		June 30,			December 31,
		2020			2019
Line of credit, gross		$	30,850		$	11,450
Unamortized deferred financing costs			(516)			(619)
Line of credit, net		$	30,334		$	10,831

At August 3, 2020, there was an outstanding balance of $17,150,000 (before unamortized deferred financing costs) under the facility. The entire $20,000,000 is available for operating expense purposes.