XML 24 R14.htm IDEA: XBRL DOCUMENT
v3.24.3

DEBT | 9 Months Ended
--- | ---
Sep. 30, 2024
Debt Disclosure [Abstract] |
DEBT | DEBT The breakdown of debt as of September 30, 2024 and December 31, 2023 is as follows:
|  | September 30, 2024 |  | December 31, 2023
Mortgage notes payable, net |  | $ | 30,863,014 |  |  | $ | 31,030,241 |
Credit facility: |  |  |  |
Term loan, net (1) |  | 248,876,279 |  |  | 248,508,515 |
Total |  | $ | 279,739,293 |  |  | $ | 279,538,756 |
(1)The increase in the net balance of the term loan reflects ongoing amortization of deferred financing costs over the remaining term of the loan at the rate of approximately $122,588 per quarter. Deferred financing costs for the revolver are included in other assets in accordance with GAAP and are being amortized at the rate of $91,673 per quarter. Mortgage Notes Payable, Net As of September 30, 2024 and December 31, 2023, the Company’s outstanding mortgage notes payable consisted of the following:
Collateral |  | 2024 Principal Amount |  | 2023 Principal Amount |  | Interest Rate (1) |  | Loan Maturity
Costco property |  | $ | 18,661,068 |  |  | $ | 18,850,000 |  |  | 4.85% |  | 01/01/2030
Taylor Fresh Foods property |  | 12,350,000 |  |  | 12,350,000 |  |  | 3.85% |  | 11/01/2029
Total mortgage notes payable |  | 31,011,068 |  |  | 31,200,000 |  |  |  |  |
Less unamortized deferred financing costs |  | (148,054) |  |  | (169,759) |  |  |  |  |
Mortgage notes payable, net |  | $ | 30,863,014 |  |  | $ | 31,030,241 |  |  |  |  |
(1)Represents the contractual interest rate in effect under the respective mortgage note payable as of September 30, 2024. The following summarizes the face value, carrying amount and fair value of the Company’s mortgage notes payable which is a Level 3 fair value measurement, reflecting unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, as of September 30, 2024 and December 31, 2023:
|  | September 30, 2024 |  | December 31, 2023
|  | Face Value |  | Carrying Value |  | Fair Value |  | Face value |  | Carrying Value |  | Fair Value
Mortgage notes payable |  | $ | 31,011,068 |  |  | $ | 30,863,014 |  |  | $ | 28,868,211 |  |  | $ | 31,200,000 |  |  | $ | 31,030,241 |  |  | $ | 27,999,621 |
Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of the period end and require a significant amount of judgment. The actual value could be materially different from the Company’s estimate of value. Credit Facility, Net The Company's Operating Partnership entered into an agreement for a line of credit (the “Credit Agreement”) on January 18, 2022, which was amended on October 21, 2022, primarily to increase the line of credit. The Credit Agreement currently provides a $400,000,000 line of credit comprised of a $150,000,000 four-year revolving line of credit, which may be extended by up to 12 months subject to certain conditions (the “Revolver”) and a $250,000,000 five-year term loan (the “Term Loan” and together with the Revolver, the “Credit Facility”) with KeyBank and the other lending institutions party thereto (collectively, the “Lenders”), including KeyBank as Agent for the Lenders (in such capacity, the “Agent”). The Credit Facility is available for general corporate purposes, including, but not limited to, acquisitions, repayment of existing indebtedness, and capital expenditures. The Credit Facility includes an accordion option that allows the Company to request additional Revolver and Term Loan lender commitments up to a total of $750,000,000 subject to customary conditions, including the receipt of new commitments from the Lenders. The Company's Revolver and Term Loan’s maturity is in January 2026 and in January 2027, respectively, with options to extend the Revolver for a total of 12 months. On December 20, 2022, the Credit Agreement was amended to allow the Company to draw on the additional $100,000,000 Term Loan commitment up to five times by April 19, 2023, in exchange for a quarterly unused fee. The $100,000,000 Term Loan commitment was fully drawn by April 19, 2023 and unused fees amounted to zero and $101,181 during the three and nine months ended September 30, 2023, respectively. The Credit Facility is priced on a leverage-based grid that fluctuates based on the Company's actual leverage ratio at the end of the prior quarter. With the Company's leverage ratio at 47% as of June 30, 2024, the spread over the secured overnight financing rate (“SOFR”), including a 10-basis point credit adjustment, is 185 basis points and the interest rate on the Revolver was 6.725% on September 30, 2024; however, there was no outstanding balance on the Revolver. The Company also pays an annual unused fee of up to 25 basis points on the Revolver, depending on the daily amount of the unused commitment, and incurred total unused fees of $95,833 and $94,525 for the three months ended September 30, 2024 and 2023, respectively, and $285,416 and $282,983 for the nine months ended September 30, 2024 and 2023, respectively. On May 10, 2022, the Company entered into a swap agreement, effective from May 31, 2022 to January 17, 2027, subject to the Company counterparty’s one-time cancellation option on December 31, 2024, to fix SOFR at 2.258% with respect to its original $150,000,000 Term Loan. The swap agreement resulted in a fixed interest rate of 4.058% on the Term Loan based on the Company's leverage ratio of 48% as of September 30, 2024. On October 26, 2022, the Company entered into a second swap agreement, effective from November 30, 2022 to November 30, 2027, subject to the Company counterparty’s one-time cancellation option on December 31, 2024, to fix SOFR at 3.44% with respect to its expanded Term Loan. The swap agreement resulted in a fixed interest rate of 5.240% on the additional $100,000,000 borrowed under the expanded Term Loan based on the Company's leverage ratio of 48% as of September 30, 2024. The Credit Facility includes customary representations, warranties and covenants. The Credit Facility is secured by a pledge of all of the Operating Partnership’s equity interests in certain of the single-purpose, property-owning entities (the “Subsidiary Guarantors”) that are indirectly owned by the Company, and various cash collateral owned by the Operating Partnership and the Subsidiary Guarantors. In connection with the Credit Facility, the Company and each of the Subsidiary Guarantors entered into an Unconditional Guaranty of Payment and Performance in favor of the Agent, pursuant to which the Company and each of the Subsidiary Guarantors agreed to guarantee the full and prompt payment of the Operating Partnership’s obligations under the Credit Agreement. Compliance with All Debt Agreements Pursuant to the terms of mortgage notes payable on certain of the Company’s properties and the Credit Facility, the Company and/or the subsidiary borrowers are subject to certain financial loan covenants. The Company and/or the subsidiary borrowers were in compliance with such financial loan covenants as of September 30, 2024. Future Principal Payments The following summarizes the future principal repayments of the Company’s mortgage notes payable and Credit Facility as of September 30, 2024:
|  | Mortgage Notes Payable |  | Credit Facility |  |
|  |  | Revolver |  | Term Loan |  | Total
October through December 2024 |  | $ | 93,536 |  |  | $ | — |  |  | $ | — |  |  | $ | 93,536 |
2025 |  | 557,211 |  |  | — |  |  | — |  |  | 557,211 |
2026 |  | 582,154 |  |  | — |  |  | — |  |  | 582,154 |
2027 |  | 608,230 |  |  | — |  |  | 250,000,000 |  |  | 250,608,230 |
2028 |  | 635,488 |  |  | — |  |  | — |  |  | 635,488 |
Thereafter |  | 28,534,449 |  |  | — |  |  | — |  |  | 28,534,449 |
Total principal |  | 31,011,068 |  |  | — |  |  | 250,000,000 |  |  | 281,011,068 |
Less: deferred financing costs, net |  | (148,054) |  |  | — |  |  | (1,123,721) |  |  | (1,271,775) |
Net principal |  | $ | 30,863,014 |  |  | $ | — |  |  | $ | 248,876,279 |  |  | $ | 279,739,293 |
Interest Expense, Including Unrealized Gain or Loss on Interest Rate Swaps and Net of Derivative Settlements The following is a reconciliation of the components of interest expense, net of derivative settlements and unrealized gain on interest rate swaps for the three and nine months ended September 30, 2024 and 2023:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Mortgage notes payable: |  |  |  |  |  |  |  |
Interest expense |  | $ | 345,424 |  |  | $ | 411,610 |  |  | $ | 1,038,855 |  |  | $ | 1,354,642 |
Amortization of deferred financing costs |  | 7,235 |  |  | 7,235 |  |  | 21,705 |  |  | 21,705 |
Credit facility: |  |  |  |  |  |  |  |
Interest expense |  | 4,565,798 |  |  | 4,509,026 |  |  | 13,586,024 |  |  | 10,895,933 |
Unused commitment fees |  | 95,833 |  |  | 94,525 |  |  | 285,416 |  |  | 384,164 |
Amortization of deferred financing costs |  | 214,261 |  |  | 214,261 |  |  | 642,783 |  |  | 642,783 |
Swap derivatives: |  |  |  |  |  |  |  |
Derivative cash settlements (1) |  | (1,647,754) |  |  | (1,586,641) |  |  | (4,953,188) |  |  | (4,062,442) |
Unrealized loss (gain) on interest rate swap valuation for first swap (2) |  | 1,355,228 |  |  | 167,926 |  |  | 2,163,396 |  |  | (327,824) |
Amortization of unrealized gain on interest rate swap valuation (2) |  | (255,873) |  |  | (253,092) |  |  | (762,059) |  |  | (756,496) |
Unrealized loss (gain) on interest rate swap valuation for second swap (3) |  | 1,323,446 |  |  | (710,258) |  |  | 282,142 |  |  | (1,697,520) |
Other |  | 100,070 |  |  | 68,326 |  |  | 209,093 |  |  | 306,834 |
Interest expense, net |  | $ | 6,103,668 |  |  | $ | 2,922,918 |  |  | $ | 12,514,167 |  |  | $ | 6,761,779 |
(1) Derivative cash settlements received from two swap instruments entered into by the Company covering (i) its original $150,000,000 Credit Facility Term Loan (first swap) effective May 31, 2022 and (ii) its additional $100,000,000 Term Loan commitment (second swap) effective November 30, 2022, as described above and in Note 8. (2) Subsequent to December 31, 2022, the Company's $150,000,000 derivative instrument failed to qualify as a cash flow hedge because it was deemed ineffective, as described in Note 8. The $1,355,228 and $2,163,396 of unrealized losses on the swap valuation for the three and nine months ended September 30, 2024, respectively, and the $167,926 and $(327,824) of unrealized loss (gain) for the three and nine months ended September 30, 2023, respectively, are recognized as an increase (decrease) in interest expense. Furthermore, the unrealized gain on interest rate swap derivative previously recorded in accumulated other comprehensive income and noncontrolling interest in Operating Partnership is being amortized on a straight-line basis as a reduction to interest expense through the maturity date of the loan agreement (see Note 8 for more details). (3) The Company's $100,000,000 derivative instrument was not designated as a cash flow hedge and, therefore, the $1,323,446 and $282,142 of unrealized losses on the valuation of this swap for the three and nine months ended September 30, 2024, respectively, are reflected as increases in interest expense. The $710,258 and $1,697,520 of unrealized gains on the valuation of this swap for the three and nine months ended September 30, 2023, respectively, are reflected as decreases in interest expense (see Note 8 for more details).

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 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: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 8: 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 9: 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 10: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/470/tableOfContent Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 Reference 12: 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 13: 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 14: 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 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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 21: 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