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Mortgage Notes Payable, Credit Facilities and Senior Notes
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Mortgage Notes Payable, Credit Facilities and Senior Notes Mortgage Notes Payable, Credit Facilities and Senior Notes
ROIC does not hold any indebtedness. All debt is held directly or indirectly by the Operating Partnership; however, ROIC has guaranteed the Operating Partnership’s unsecured term loan, unsecured revolving credit facility, carve-out guarantees on property-level debt, and the Senior Notes. Costs incurred in obtaining long-term financing are amortized ratably over the related debt agreement. The amortization of deferred financing costs and debt discounts is included in Interest expense and other finance expenses in the consolidated statements of operations and comprehensive income.

Mortgage Notes Payable

The mortgage notes payable collateralized by respective properties and assignment of leases at March 31, 2024 and December 31, 2023, respectively, were as follows (in thousands, except interest rates):

PropertyMaturity DateInterest RateMarch 31, 2024December 31, 2023
Fullerton CrossroadsApril 20244.728 %$26,000 $26,000 
Diamond Hills PlazaOctober 20253.550 %33,868 34,045 
   $59,868 $60,045 
Unamortized mortgage premiums 18 72 
Net unamortized deferred financing costs (55)(65)
Total mortgage notes payable $59,831 $60,052 

Term Loan and Credit Facility
 
The carrying values of the Operating Partnership’s unsecured term loan (the “term loan”) were as follows (in thousands):

 March 31, 2024December 31, 2023
Term loan$200,000 $200,000 
Net unamortized deferred financing costs(195)(255)
Term loan$199,805 $199,745 
 
The Operating Partnership has an unsecured term loan (the “term loan”) with several banks. Effective March 2, 2023, the Operating Partnership entered into a Third Amendment to the First Amended and Restated Term Loan Agreement, dated as of September 8, 2017, as amended (the “Term Loan Agreement”). Under the Term Loan Agreement, the lenders agreed to provide $300.0 million of unsecured borrowings. The maturity date of the term loan is January 20, 2025, without further options for extension. The Term Loan Agreement also provides that the Operating Partnership may from time to time request increased aggregate commitments of $200.0 million if certain conditions are met, including the consent of the lenders to the additional commitments.
Under the Term Loan Agreement, Secured Overnight Financing Rate (“SOFR”) based loans bear interest at Daily Simple SOFR or Term SOFR plus an index adjustment of 0.10% plus an applicable rate based on the credit rating of the Company (currently 1.0%). Base Rate Loans bear interest at a rate equal to an applicable rate based on the credit rating of the Company (currently 0.0%) plus the greater of (i) the Federal Funds Rate plus 0.50%, (ii) the rate publicly announced by KeyBank National Association as its “prime rate,” and (iii) one month Adjusted Term SOFR plus 1.0%. Capitalized terms used in this paragraph but not otherwise defined herein have the meanings set forth in the Term Loan Agreement.
 
The Operating Partnership has an unsecured revolving credit facility (the “credit facility”) with several banks. Effective March 2, 2023, the Operating Partnership entered into a Third Amendment to the Second Amended and Restated Credit Agreement, dated as of September 8, 2017 (as amended, the “Credit Facility Agreement”). Under the Credit Facility Agreement, the Operating Partnership has borrowing capacity of up to $600.0 million. The maturity date under the Credit Facility Agreement is March 2, 2027, with two six-month extension options, which may be exercised by the Operating Partnership upon satisfaction of certain conditions including the payment of extension fees. Additionally, the Credit Facility Agreement contains an accordion feature, which allows the Operating Partnership to increase the borrowing capacity under the Credit Facility Agreement up to an aggregate of $1.2 billion, subject to lender consents and other conditions.

Under the Credit Facility Agreement, SOFR based loans bear interest at Daily Simple SOFR or Term SOFR plus an index adjustment of 0.10% plus an applicable rate based on the credit rating of the Company (currently 0.85%). Base Rate Loans and Swing Line Loans bear interest at a rate equal to an applicable rate based on the credit rating of the Company (currently 0.0%) plus the greater of (i) the Federal Funds Rate plus 0.50%, (ii) the rate publicly announced by KeyBank National Association as its “prime rate,” and (iii) one month Adjusted Term SOFR plus 1.0%. Capitalized terms used in this paragraph but not otherwise defined herein have the meanings set forth in the Credit Facility Agreement.

Additionally, the Operating Partnership is obligated to pay a facility fee at a rate based on the credit rating level of the Company (currently 0.20%) and a fronting fee at a rate of 0.125% per year with respect to each letter of credit issued under the Credit Facility Agreement, of which the Operating Partnership had $150,000 outstanding as of March 31, 2024. The Company has investment grade credit ratings from Moody’s Investors Service (Baa2), S&P Global Ratings (BBB-) and Fitch Ratings (BBB).

As of March 31, 2024, there was $68.0 million outstanding under the credit facility compared to $75.0 million outstanding as of December 31, 2023. The net unamortized deferred financing costs, which are included in Deferred charges, net in the accompanying consolidated balance sheets, were approximately $4.6 million as of March 31, 2024 compared to approximately $5.0 million as of December 31, 2023.

The weighted average interest rate on the term loan during the three months ended March 31, 2024 was 6.4%. As discussed in Note 8 of the accompanying consolidated financial statements, the Company uses interest rate swaps to help manage its interest rate risk. For the three months ended March 31, 2024, $150.0 million of the Company’s term loan was swapped at a blended interest rate of 5.4%. The weighted average interest rate on the credit facility during the three months ended March 31, 2024 was 6.3%. The Company had no amounts available to borrow under the term loan at March 31, 2024. The Company had approximately $532.0 million available to borrow under the credit facility at March 31, 2024.

Senior Notes

The Operating Partnership issued $350.0 million aggregate principal amount of unsecured senior notes in September 2023 (the “Senior Notes Due 2028”), $250.0 million aggregate principal amount of unsecured senior notes in December 2017 (the “Senior Notes Due 2027”), $200.0 million aggregate principal amount of unsecured senior notes in September 2016 (the “Senior Notes Due 2026”), and $250.0 million aggregate principal amount of unsecured senior notes in December 2014 (the “Senior Notes Due 2024” and collectively with the Senior Notes Due 2026, the Senior Notes Due 2027 and the Senior Notes Due 2028, the “Senior Notes”).
The key terms of the Operating Partnership’s Senior Notes are as follows:

Senior NotesAggregate Principal Amount (in thousands)Issue Date and Interest Accrual DateMaturity DateContractual Interest RateFirst Interest PaymentInterest Payments Due
Senior Notes Due 2028$350,000 September 21, 2023October 15, 20286.75 %April 15, 2024April 15 and October 15
Senior Notes Due 2027$250,000 December 15, 2017December 15, 20274.19 %June 15, 2018June 15 and December 15
Senior Notes Due 2026$200,000 September 22, 2016September 22, 20263.95 %March 22, 2017March 22 and September 22
Senior Notes Due 2024$250,000 December 3, 2014December 15, 20244.00 %June 15, 2015June 15 and December 15

The Operating Partnership completed registered underwritten public offerings for the Senior Notes Due 2028 and the Senior Notes Due 2024 and completed private placements for the Senior Notes Due 2027 and the Senior Notes Due 2026. The Senior Notes are the Operating Partnership’s senior unsecured obligations that rank equally in right of payment with the Operating Partnership’s other unsecured indebtedness, and effectively junior to (i) all of the indebtedness and other liabilities, whether secured or unsecured, and any preferred equity of the Operating Partnership’s subsidiaries, and (ii) all of the Operating Partnership’s indebtedness that is secured by its assets, to the extent of the value of the collateral securing such indebtedness outstanding. ROIC fully and unconditionally guarantees the Operating Partnership’s obligations under the Senior Notes on a senior unsecured basis, including the due and punctual payment of principal of, and premium, if any, and interest on, the notes, whether at stated maturity, upon acceleration, notice of redemption or otherwise. ROIC’s guarantees are senior unsecured obligations of ROIC and rank equally in right of payment with all other senior unsecured indebtedness of ROIC. ROIC’s guarantees of the Senior Notes are effectively subordinated in right of payment to all liabilities, whether secured or unsecured, and any preferred equity of ROIC’s subsidiaries (including the Operating Partnership and any entity ROIC accounts for under the equity method of accounting).

The carrying value of the Operating Partnership’s Senior Notes are as follows (in thousands):
 
March 31, 2024December 31, 2023
Principal amount$1,050,000 $1,050,000 
Unamortized debt discount(1,858)(2,033)
Net unamortized deferred financing costs(4,085)(4,374)
Senior Notes$1,044,057 $1,043,593 

The Operating Partnership’s debt agreements contain customary representations, financial and other covenants, and its ability to borrow under these agreements is subject to its compliance with financial covenants and other restrictions on an ongoing basis. The Operating Partnership was in compliance with such covenants at March 31, 2024.