Note 4 - Mortgage and Other Indebtedness

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 4. Mortgage and Other Indebtedness

Mortgage and other indebtedness consisted of the following at March 31, 2014 and December 31, 2013:

	Balance at
	March 31, 2014		December 31, 2013
Unsecured revolving credit facility	$	145,000	$	145,000
Unsecured term loan		230,000		230,000
Notes payable secured by properties under construction - variable rate		164,158		144,389
Mortgage notes payable - fixed rate		271,242		276,504
Mortgage notes payable - variable rate		60,871		61,185
Net premiums on acquired debt		63		66
Total mortgage and other indebtedness	$	871,334	$	857,144

Consolidated indebtedness, including weighted average maturities and weighted average interest rates at March 31, 2014, is summarized below:

	Amount			Weighted Average Maturity (Years)		Weighted Average Interest Rate			Percentage of Total
Fixed rate debt	$	271,242			4.2		5.76	%		31	%
Floating rate debt (hedged to fixed)		326,702			3.9		3.28	%		37	%
Total fixed rate debt, considering hedges		597,944			4.0		4.40	%		68	%
Notes payable secured by properties under construction - variable rate		164,158			1.3		2.33	%		19	%
Other variable rate debt		60,871			4.4		2.38	%		7	%
Corporate unsecured variable rate debt		375,000			4.5		2.01	%		43	%
Floating rate debt (hedged to fixed)		(326,702	)		-3.9		-2.14	%		-37	%
Total variable rate debt, considering hedges		273,327			3.3		2.14	%		32	%
Net premiums on acquired debt		63			N/A		N/A			N/A
Total debt	$	871,334			3.8		3.69	%		100	%

Mortgage and construction loans are collateralized by certain real estate properties and leases. Mortgage loans are generally due in monthly installments of interest and principal and mature over various terms through 2022.

Variable interest rates on mortgage and construction loans are based on LIBOR plus spreads ranging from 180 to 294 basis points. At March 31, 2014, the one-month LIBOR interest rate was 0.15%. Fixed interest rates on mortgage loans range from 5.42% to 6.78%.

Unsecured Revolving Credit Facility and Unsecured Term Loan 

The amount that the Company may borrow under the unsecured revolving credit facility is based on the value of assets in its unencumbered property pool. As of March 31, 2014, the full amount of the unsecured revolving credit facility, or $200 million, was available for draw based on the unencumbered property pool allocated to the facility. Taking into account outstanding draws and letters of credit, the Company had $49.8 million available for future borrowings under the unsecured revolving credit facility. As of March 31, 2014, the Company had 63 unencumbered properties, of which 54 were wholly-owned by subsidiaries which are guarantors under the unsecured revolving credit facility and the unsecured term loan, as amended (the “Term Loan”). In addition, there are four unencumbered assets that would provide approximately $120 million of additional borrowing capacity under the unsecured revolving credit facility if they were contributed to the unencumbered property pool and the accordion feature was exercised.

As of March 31, 2014, $145.0 million was outstanding under the unsecured revolving credit facility and $230.0 million was outstanding under the Term Loan. Based upon the current unencumbered property pool allocated to the unsecured revolving credit facility, the amount available for future borrowings under the unsecured revolving credit facility was approximately $49.8 million. Further, the Company had letters of credit outstanding which totaled $5.2 million. As of March 31, 2014, there were no amounts advanced against these instruments.

The Company’s ability to borrow under the unsecured revolving credit facility is subject to ongoing compliance with various restrictive covenants, including with respect to liens, indebtedness, investments, dividends, mergers and asset sales.  In addition, the unsecured revolving credit facility and the Term Loan also require the Company to satisfy certain financial covenants. As of March 31, 2014, the Company was in compliance with all such covenants on the unsecured revolving credit facility and the Term Loan.

Debt Activity

For the three months ended March 31, 2014, the Company made total loan borrowings of $41.3 million and total loan repayments of $27.1 million. The major components of this activity are as follows:

● In February, a draw of $14.7 million was made on the unsecured revolving credit facility to fund redevelopment and tenant improvement costs;

● In March, pay downs totaling $14.7 million were made on the unsecured revolving credit facility utilizing a portion of proceeds from current quarter property sales;

● In January, a pay-off of the $4.0 million loan secured by the 50^th and 12^th operating property was made using a portion of the proceeds from the sale of the property (see Note 8);

● In March, the $6.9 million Beacon Hill variable rate loan was refinanced and the maturity of the loan was extended to March 2018;

● Draws were made on construction loans related to the Delray Marketplace, Holly Springs – Phase I, Rangeline Crossing, Parkside – Phase I and Parkside – Phase II developments totaling $19.8 million throughout the period; and

Scheduled principal payments were made on indebtedness totaling $1.5 million.

Fair Value of Fixed and Variable Rate Debt

As of March 31, 2014, the fair value of fixed rate debt was $287.1 million compared to the book value of $271.2 million. The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments which ranged from 2.78% to 5.33%. As of March 31, 2014, the fair value of variable rate debt was $598.8 million compared to the book value of $600.0 million. The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments which ranged from 1.80% to 3.58%.