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Mortgage Loans Payable And Credit Facility | 3 Months Ended
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Mar. 31, 2014
Mortgage Loans Payable And Credit Facility [Abstract] |
Mortgage Loans Payable And Credit Facility | Note 6. Mortgage Loans Payable and Credit Facility Mortgage Loans P ayable During the three months ended March 31, 2014, the Company pre paid $58.1 million of mortgage loans payable (including $0.3 million included in mortgage loans payable – real estate held for sale/conveyance). Unsecured Revolving C redit F acility and Term Loans The Company has a $260 million revolving credit facility, expiring on August 1, 2016. T he revolving credit facility may be extended, at the Company’s option, for two additional one-year periods, s ubject to customary conditions. Under an accordion feature, the facility can be increased to $500 million, subject to customary conditions, and lending commitments from participating banks. The facility contains financial covenants including, but not limited to, maximum debt leverage, maximum secured debt, minimum interest coverage, minimum fixed charge coverage, and minimum net worth. In addition, the facility contains restrictions including, but not limited to, limits on indebtedness, certain investments and distributions. Although the facility is unsecured, borrowing availability is based on unencumbered property adjusted net operating income, as defined in the agreement. The Company’s failure to comply with the covenants or the occurrence of an event of default under the facility could result in the acceleration of the related debt. Borrowings under the revolving credit facility are priced at LIBOR plus 195 basis points (“bps”) (a weighted average rate of 2.2% per annum at March 31, 2014), and can range from LIBOR plus 165 bps to 225 bps based on the Company’s leverage ratio. As of March 31, 2014, the Company had $119.0 million outstanding under the revolving credit facility, and had $133.2 million available for additional borrowings. On February 11, 2014, the Company closed $150 million of unsecured term loans consisting of a five-year $75 million term loan, maturing on February 11, 2019, and a seven-year $75 million term loan, maturing on February 11, 2021. Under an accordion feature, the term loans can be increased to an aggregate of $300 million, subject to customary conditions and lending commitments from participating banks. The financial covenants and other terms contained in the loan agreement are substantially the same as those contained in the Company’s revolving credit facility (see above). In connection with the transaction, the Company paid fees and legal expenses of approximately $1.1 million. The five-year term loan, all of which was borrowed at closing, is priced at LIBOR plus 175 bps (a weighted average rate of 1.9% per annum at March 31, 2014), and can range from LIBOR plus 145 bps to 205 bps based on the Company’s leverage ratio. The seven-year term loan, none of which has been borrowed at March 31, 2014, will be initially priced at LIBOR plus 200 bps, and can range from LIBOR plus 170 bps to 230 bps, also based on the Company’s leverage ratio. The Company has until July 1, 2014 to borrow the $75.0 million under the seven-year term loan. The Company also entered into forward interest rate swap agreements which convert the LIBOR rates to fixed rates for the new term loans beginning July 1, 2014 through their maturities. As a result, the effective fixed interest rates will be 3.37% for the five-year term loan and 4.27% for the seven-year term loan beginning July 1, 2014, based on the Company’s current leverage ratio. Derivative Financial I nstruments As discussed above, on February 11, 2014, the Company closed $150 million of unsecured term loans for which it entered into forward interest rate swap agreements, effective July 1, 2014. At March 31, 2014, the Company had a mortgage loan payable of approximately $11.8 million (included in mortgage loans payable – real estate held for sale/conveyance on the consolidated balance sheet) subject to an interest rate swap. The interest rate swap converted the LIBOR-based variable rate to a fixed rate of 5.2% per annum. At March 31, 2014, the Company had on the consolidated balance sheet (1) $589,000 included in other assets and deferred charges, net, relating to the fair value of the interest rate swaps applicable to the $150 million unsecured term loans which closed on February 11, 2014, and (2) $625,000 included in accounts payable and accrued liabilities relating to the fair value of the interest rate swap applicable to the mortgage loan payable. Charges and/or credits relating to the changes in the fair value of the interest rate swap s are made to accumulated other comprehensive income (loss), noncontrolling interests (minority interests in consolidated joint ventures and limited partners’ interest), or operations (included in interest expense), as appropriate. The following is a summary of the derivative financial instruments held by the Company at March 31, 2014 and December 31, 201 3:
|  |  |  |  | Notional values |  |  |  | Balance |  | Fair value
Designation/ |  |  |  |  | March 31, |  |  |  | December 31, |  | Maturity |  | sheet |  | March 31, |  | December 31,
Cash flow | Derivative |  | Count |  | 2014 |  | Count |  | 2013 |  | date |  | location |  | 2014 |  | 2013
Qualifying | Interest rate swaps |  | 2 |  | $ 75,000,000 |  | - |  | $ - |  | 2021 |  | Other assets and deferred charges, net |  | $ 589,000 |  | $ -
Qualifying | Interest rate swap |  | 1 |  | $ 11,827,000 | (a) | 1 |  | $ 11,894,000 | (a) | 2018 |  | Accounts payable and accrued liabilities |  | $ 625,000 |  | $ 647,000
(a) At March 31, 2014 and December 31, 2013, amounts are interest rate swaps related to mortgage loans payable - real estate held for sale/conveyance on the consolidated balance sheets.
The following presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations and the consolidated statements of equity for the three months ended March 31, 2014 and 201 3, respectively:
|  |  | Net amount of gain recognized in other
|  |  | comprehensive income (effective portion)
Designation/ |  |  | Three months ended March 31,
Cash flow | Derivative |  | 2014 |  | 2013
Qualifying (a) | Interest rate swaps |  | $ 688,000 |  | $ 340,000
(a) For the three months ended March 31, 2014 and March 31, 2013, $77,000 and $252,000, respectively, were reclassified from other comprehensive income to interest expense in the consolidated statements of operations. Additionally, for the three months ended March 31, 2014 and March 31, 2013, $76,000 and $77,000, respectively, were reclassified from other comprehensive income to interest expense, which is included in discontinued operations.
As of March 31, 2014, the Company believes it has no significant risk associated with non-performance of the financial institutions which are the counterparties to its derivative contracts.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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