Notes Payable

6 Months Ended

Jun. 30, 2024

Debt Disclosures

Notes Payable

6. Notes Payable

Notes payable consisted of the following (in thousands):

						Balance Outstanding as of
	June 30, 2024					June 30,		December 31,
	Rate Type		Interest Rate		Maturity Date	2024		2023
						(unaudited)
Mortgage Loans
JW Marriott New Orleans	Fixed		4.15	%	December 11, 2024	$	72,978	$	74,050
Unsecured Corporate Credit Facilities
Term Loan 1	Fixed	(1)	5.27	%	July 25, 2027	$	175,000	$	175,000
Term Loan 2	Variable	(2)	6.78	%	January 25, 2028		175,000		175,000
Term Loan 3	Variable	(3)	6.78	%	May 1, 2025		225,000		225,000
Total unsecured corporate credit facilities						$	575,000	$	575,000
Unsecured Senior Notes
Series A	Fixed		4.69	%	January 10, 2026	$	65,000	$	65,000
Series B	Fixed		4.79	%	January 10, 2028		105,000		105,000
Total unsecured senior notes						$	170,000	$	170,000
Total debt							817,978		819,050
Unamortized deferred financing costs							(3,715)		(4,491)
Debt, net of unamortized deferred financing costs						$	814,263	$	814,559

(1) Term Loan 1 is subject to two interest rate swap derivatives (see Note 4). The variable interest rate is based on a pricing grid with a range of 1.35% to 2.20%, depending on the Company’s leverage ratios, plus SOFR and a 0.10% adjustment. The Company did not achieve its 2023 sustainability performance metric as specified in the Second Amended Credit Agreement, resulting in the pricing grid returning to its range of 1.35% to 2.20% in May 2024, an increase of 0.02% from the previous year. The pricing grid is evaluated annually and is subject to the Company’s ability to satisfy its sustainability metric. The effective interest rate on the term loan was 5.27% and 5.25% at June 30, 2024 and December 31, 2023, respectively.

(2) Term Loan 2’s variable interest rate is based on a pricing grid with a range of 1.35% to 2.20%, depending on the Company’s leverage ratios, plus SOFR and a 0.10% adjustment. The Company did not achieve its 2023 sustainability performance metric as specified in the Second Amended Credit Agreement, resulting in the pricing grid returning to its range of 1.35% to 2.20% in May 2024, an increase of 0.02% from the previous year. The pricing grid is evaluated annually and is subject to the Company’s ability to satisfy its sustainability metric. The effective interest rates on the term loan were 6.78% and 6.77% at June 30, 2024 and December 31, 2023, respectively.

(3) Term Loan 3’s variable interest rate is based on a pricing grid with a range of 1.35% to 2.20%, depending on the Company’s leverage ratios, plus SOFR and a 0.10% adjustment. The effective interest rates on the term loan were 6.78% and 6.81% at June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024, the Company had no amount outstanding on its credit facility, with $500.0 million of capacity available for borrowing under the facility. The Company’s ability to draw on the credit facility is subject to the Company’s compliance with various covenants.

Interest Expense

Total interest incurred and expensed on the Company’s debt was as follows (unaudited and in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Interest expense on debt	$	12,304	$	12,259	$	24,617	$	23,676
Noncash interest on derivatives, net		(189)		(3,711)		(2,231)		(1,879)
Amortization of deferred financing costs		739		675		1,478		1,220
Capitalized interest		(161)		—		(161)		—
Total interest expense	$	12,693	$	9,223	$	23,703	$	23,017