Secured and unsecured senior debt

9 Months Ended

Sep. 30, 2015

The following table summarizes our secured and unsecured senior debt as of September 30, 2015 (dollars in thousands):



	Fixed-Rate/Hedged Variable-Rate			Unhedged Variable-Rate			Total Consolidated			Percentage of Total Debt		Weighted-Average Interest Rate at End of Period ⁽¹⁾		Weighted-Average Remaining Term (in years)
Secured notes payable	$	478,016		$	295,603		$	773,619		17.9	%	4.23	%	2.6
Unsecured senior notes payable	1,747,613			—			1,747,613			40.5		3.98		7.6
$1.5 billion unsecured senior line of credit	100,000			743,000			843,000			19.6		1.19		3.3
2019 Unsecured Senior Bank Term Loan	600,000			—			600,000			13.9		1.72		3.3
2021 Unsecured Senior Bank Term Loan	350,000			—			350,000			8.1		1.52		5.3
Total/weighted-average	$	3,275,629		$	1,038,603		$	4,314,232		100.0	%	2.97	%	5.1
Percentage of total debt	76		%	24		%	100		%


(1)	Represents the weighted-average interest rate as of the end of the period plus the impact of debt premiums/discounts and our interest rate swap agreements. The weighted-average interest rate excludes bank fees and amortization of loan fees.

The following table summarizes our outstanding indebtedness and respective principal maturities as of September 30, 2015 (dollars in thousands):



	Stated Rate			Weighted- Average Interest Rate⁽¹⁾		Maturity Date⁽²⁾		Principal Payments Remaining for the Periods Ending December 31,
Debt	Stated Rate			Weighted- Average Interest Rate⁽¹⁾		Maturity Date⁽²⁾		2015			2016			2017			2018			2019			Thereafter			Total
Secured notes payable
Greater Boston, San Francisco, and San Diego	5.73	%		5.73	%	⁽³⁾		$	466		$	75,501		$	—		$	—		$	—		$	—		$	75,967
Greater Boston, New York City, and San Diego,	5.82			5.82		4/1/16		249			29,389			—			—			—			—			29,638
San Diego	5.74			3.00		4/15/16		45			6,916			—			—			—			—			6,961
San Francisco	L+1.40			1.59		6/1/16	⁽⁴⁾	—			20,714			—			—			—			—			20,714
San Francisco	L+1.50			1.69		7/1/16	⁽⁵⁾	—			47,385			—			—			—			—			47,385
San Francisco	6.35			6.35		8/1/16		662			126,715			—			—			—			—			127,377
Maryland	2.18			2.18		1/20/17		—			—			76,000			—			—			—			76,000
Greater Boston	L+1.35			1.54		8/23/17	⁽⁶⁾	—			—			151,504			—			—			—			151,504
San Diego, Seattle, and Maryland	7.75			7.75		4/1/20		404			1,696			1,832			1,979			2,138			104,352			112,401
San Diego	4.66			4.66		1/1/23		354			1,464			1,540			1,614			1,692			31,674			38,338
Greater Boston	3.93			3.10		3/10/23		—			—			—			1,091			1,505			79,404			82,000
San Francisco	6.50			6.50		7/1/36		1			19			20			22			23			728			813
Unamortized premiums								184			610			573			588			595			1,971			4,521
Secured notes payable weighted-average/subtotal	4.35	%		4.23				2,365			310,409			231,469			5,294			5,953			218,129			773,619

2019 Unsecured Senior Bank Term Loan	L+1.20	%		1.72		1/3/19		—			—			—			—			600,000			—			600,000
2021 Unsecured Senior Bank Term Loan	L+1.10	%		1.52		1/15/21		—			—			—			—			—			350,000			350,000
$1.5 billion unsecured senior line of credit	L+1.10	%	⁽⁷⁾	1.19		1/3/19		—			—			—			—			843,000			—			843,000
Unsecured senior notes payable	2.75	%		2.79		1/15/20		—			—			—			—			—			400,000			400,000
Unsecured senior notes payable	4.60	%		4.61		4/1/22		—			—			—			—			—			550,000			550,000
Unsecured senior notes payable	3.90	%		3.94		6/15/23		—			—			—			—			—			500,000			500,000
Unsecured senior notes payable	4.50	%		4.51		7/30/29		—			—			—			—			—			300,000			300,000
Unamortized discounts								(83		)	(337		)	(350		)	(362		)	(375		)	(880		)	(2,387		)
Unsecured debt weighted-average/subtotal				2.69				(83		)	(337		)	(350		)	(362		)	1,442,625			2,099,120			3,540,613
Weighted-average/total				2.97	%			$	2,282		$	310,072		$	231,119		$	4,932		$	1,448,578		$	2,317,249		$	4,314,232

Balloon payments								$	—		$	304,999		$	227,504		$	—		$	1,443,000		$	2,304,466		$	4,279,969
Principal amortization								2,282			5,073			3,615			4,932			5,578			12,783			34,263
Total consolidated debt								$	2,282		$	310,072		$	231,119		$	4,932		$	1,448,578		$	2,317,249		$	4,314,232

Fixed-rate/hedged variable-rate debt								$	2,282		$	241,973		$	3,615		$	4,932		$	705,578		$	2,317,249		$	3,275,629
Unhedged variable-rate debt								—			68,099			227,504			—			743,000			—			1,038,603
Total consolidated debt								$	2,282		$	310,072		$	231,119		$	4,932		$	1,448,578		$	2,317,249		$	4,314,232


(1)	Represents the weighted-average interest rate as of the end of the period plus the impact of debt premiums/discounts and our interest rate swap agreements. The weighted-average interest rate excludes bank fees and amortization of loan fees.


(2)	Includes any extension options that we control.


(3)	In October 2015, we repaid this secured note payable.


(4)	We have two, one-year options to extend the stated maturity date to June 1, 2018, subject to certain conditions.


(5)	We have a one-year option to extend the stated maturity date to July 1, 2017, subject to certain conditions.


(6)	We have a one-year option to extend the stated maturity date to August 23, 2018, subject to certain conditions.


(7)	Our unsecured senior line of credit contains a feature that allows lenders to competitively bid on the interest rate for borrowings under the facility. This may result in an interest rate that is below the stated rate of LIBOR+1.10%. In addition to the cost of borrowing, the facility is subject to an annual facility fee of 0.20%, based on the aggregate commitments outstanding.

Interest expense

The following table summarizes interest expense for the three and nine months ended September 30, 2015 and 2014 (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Gross interest	$	36,115		$	32,680		$	105,427		$	92,551
Capitalized interest	(8,436		)	(12,125		)	(27,844		)	(35,440		)
Interest expense	$	27,679		$	20,555		$	77,583		$	57,111

Amendment of unsecured senior bank term loan

In June 2015, we completed a partial principal repayment of $25.0 million and extended the maturity of the remaining $350.0 million unsecured senior bank term loan (“2021 Unsecured Senior Bank Term Loan”) from July 31, 2015, to June 30, 2019, subject to our option to extend the maturity up to three times upon the satisfaction of certain conditions, for an additional term of six months for the first and second extensions and for an additional term ending on January 15, 2021, for the third extension. In addition, we reduced the applicable interest rate margin with respect to borrowings outstanding under the loan to LIBOR+1.10% from LIBOR+1.20%. In conjunction with the amendment of our 2021 Unsecured Senior Bank Term Loan and the principal repayment, we recognized a loss on early extinguishment of debt aggregating $189 thousand related to the write-off of a portion of unamortized loan fees.

Secured construction loans

In June 2015, we exercised the first of two, one-year extensions on a $47.4 million secured construction loan, which extended the maturity date from July 1, 2015, to July 1, 2016.

The following table summarizes our secured construction loans as of September 30, 2015 (dollars in thousands):



Market	Stated Rate			Maturity Date		Outstanding Balance		Remaining Commitments		Total Commitments
San Francisco		L+1.40	%	6/1/16	⁽¹⁾	$	20,714	$	15,286	$	36,000
San Francisco		L+1.50	%	7/1/16	⁽²⁾	47,385		7,615		55,000
Greater Boston		L+1.35	%	8/23/17	⁽³⁾	151,504		98,896		250,400
						$	219,603	$	121,797	$	341,400


(1)	We have two, one-year options to extend the stated maturity date to June 1, 2018, subject to certain conditions.


(2)	We have a one-year option to extend the stated maturity date to July 1, 2017, subject to certain conditions.


(3)	We have a one-year option to extend the stated maturity date to August 23, 2018, subject to certain conditions.

During October 2015, we executed the following secured construction loan (dollars in thousands):



Market	Stated Rate		Maturity Date	Outstanding Balance		Remaining Commitments		Total Commitments
Greater Boston ⁽¹⁾		L+1.50%	1/28/19	$	—	$	350,000	$	350,000


(1)	In October 2015, closed a secured construction loan with aggregate commitments available for borrowing of $350.0 million, for our 98% leased development project at 50/60 Binney Street in our Cambridge submarket, which bears interest at a rate of LIBOR+150 bps.