Debt

9 Months Ended

Sep. 30, 2016

As of September 30, 2016 and December 31, 2015, the Company’s debt consisted of the following:



	Balance as of
	September 30, 2016			December 31, 2015			Contractual Interest Rate ⁽¹⁾	Loan Maturity	Effective Interest Rate ⁽²⁾
Plainfield mortgage loan	$	19,027		$	19,295		6.65%	November 2017	6.74%
Emporia Partners mortgage loan	3,474			3,753			5.88%	September 2023	5.96%
TransDigm mortgage loan	—			6,432			5.98%	—	—
Ace Hardware mortgage loan	23,019			23,294			5.59%	April 2017 ⁽⁵⁾	4.69%
Highway 94 mortgage loan	18,376			18,968			3.75%	August 2024	5.07%
DynCorp mortgage loan	—			11,162			4.70%	—	—
Mercedes-Benz mortgage loan	18,618			18,945			6.02%	November 2016	6.10%
Samsonite mortgage loan	23,984			24,561			6.08%	September 2023	4.96%
HealthSpring mortgage loan	22,260			—			4.18%	April 2023	4.60%
Midland mortgage loan	105,600			105,600			3.94%	April 2023	4.04%
AIG loan	110,640			110,640			4.96%	February 2029	5.14%
TW Telecom loan	20,568			21,213			LIBO Rate +2.45% ⁽³⁾	August 2019	2.87%
Total Mortgage Loans	365,566			363,863
Term Loan (July 2015)	715,000			640,000			LIBO Rate +1.40% ⁽³⁾	July 2020	2.11%
Revolver Loan (July 2015)	382,409			481,653			LIBO Rate +1.45% ⁽³⁾	July 2020 ⁽⁴⁾	2.30%
Total Debt	1,462,975			1,485,516
Unamortized Deferred Financing Costs and Premiums/(Discounts)	(10,555		)	(12,089		)
Total Debt, net	$	1,452,420		$	1,473,427


(1)	Including the effect of interest rate swap agreements with a total notional amount of $825.0 million, the weighted average interest rate as of September 30, 2016 was 3.24% for the Company’s fixed-rate and variable-rate debt combined and 3.55% for the Company’s fixed-rate debt only.


(2)	Reflects the effective interest rate as of September 30, 2016 and includes the effect of amortization of discounts/premiums and deferred financing costs.


(3)	The LIBO Rate as of September 30, 2016 was 0.53%.


(4)	The Revolver Loan (July 2015) has an initial term of four years, maturing on July 20, 2019, and may be extended for a one-year period if certain conditions are met and upon payment of an extension fee. See discussion below.


(5)	Loan matures in October 2024. The interest rate of this loan resets on April 1, 2017 to the greater of (i) 8.9% or (ii) 500 basis points plus 10-year swap rate.

Unsecured Credit Facility (July 2015)

On July 20, 2015, the Company, through the Operating Partnership, entered into a credit agreement (the "Unsecured Credit Agreement (July 2015)") with a syndicate of lenders, co-led by KeyBank, Bank of America, Fifth Third Bank ("Fifth Third"), and BMO Harris Bank, N.A. ("BMO Harris"), under which KeyBank serves as administrative agent and Bank of America, Fifth Third, and BMO Harris serve as co-syndication agents, and KeyBanc Capital Markets ("KeyBank Capital markets"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Fifth Third, and BMO Capital Markets serve as joint bookrunners and joint lead arrangers. Pursuant to the Unsecured Credit Agreement (July 2015), the Company was provided with a $1.14 billion senior unsecured credit facility (the "Unsecured Credit Facility (July 2015)"), consisting of a $500.0 million senior unsecured revolver (the "Revolver Loan (July 2015)") and a $640.0 million senior unsecured term loan (the "Term Loan (July 2015)"). The Unsecured Credit Facility (July 2015) may be increased up to $860.0 million, in minimum increments of $50.0 million, for a maximum of $2.0 billion by increasing either the Revolver Loan (July 2015), the Term Loan (July 2015), or both. The Revolver Loan (July 2015) has an initial term of four years, maturing on July 20, 2019, and may be extended for a one-year period if certain conditions are met and upon payment of an extension fee. The Term Loan (July 2015) has a term of five years, maturing on July 20, 2020.

The Unsecured Credit Facility (July 2015) has an interest rate calculated based on LIBO Rate plus the applicable LIBO Rate margin or Base Rate plus the applicable Base Rate margin, both as provided in the Unsecured Credit Agreement (July 2015). The applicable LIBO Rate margin and Base Rate margin are dependent on whether the interest rate is calculated prior to or after the Company has received an investment grade senior unsecured credit rating of BBB-/Baa3 from Standard & Poors, Moody's, or Fitch, and the Company has elected to utilize the investment grade pricing list, as provided in the Unsecured Credit Agreement (July 2015). Otherwise, the applicable LIBO Rate margin will be based on a leverage ratio computed in accordance with the Company's quarterly compliance package and communicated to KeyBank. The Base Rate is calculated as the greater of (i) the KeyBank Prime rate or (ii) the Federal Funds rate plus 0.50%. Payments under the Unsecured Credit Facility (July 2015) are interest only and are due on the first day of each quarter.

On March 29, 2016, the Company exercised its right to increase the total commitments, pursuant to the Unsecured Credit Agreement (July 2015). As a result, the total commitments on the Term Loan (July 2015) increased from $640.0 million to $715.0 million.

HealthSpring Mortgage Loan

As part of the acquisition of the remaining 90% beneficial interest in the HealthSpring property, the Company assumed a $22.4 million mortgage loan (the "HealthSpring mortgage loan") held with Barclays Bank PLC. The HealthSpring mortgage loan, which matures on April 6, 2023, has a fixed interest rate of 4.18% and requires monthly payments of principal and interest.

Debt Covenant Compliance

Pursuant to the terms of the Company's mortgage loans and Unsecured Credit Facility (July 2015), the Operating Partnership, in consolidation with the Company, is subject to certain loan compliance covenants. The Company was in compliance with all of its debt covenants as of September 30, 2016.

The following summarizes the future principal repayments of all loans as of September 30, 2016 per the loan terms discussed above:



	September 30, 2016
Remaining 2016	$	19,632		⁽¹⁾
2017	47,826			⁽²⁾
2018	7,131
2019	25,204			⁽³⁾
2020	1,104,290			⁽⁴⁾
Thereafter	258,892			⁽⁴⁾
Total principal	1,462,975
Unamortized debt premium/(discount)	1,060
Unamortized deferred loan costs	(11,615		)
Total	$	1,452,420


(1)	Amount includes payment of the balance of the Mercedes-Benz property mortgage loan, which matures in 2016.


(2)	Amount includes payment of the balance of the Plainfield and Ace Hardware property mortgage loans, which mature in 2017.


(3)	Amount includes payment of the balance of the TW Telecom loan, which matures in 2019.


(4)	Amount includes payment of the balances of:


•	the Term Loan (July 2015), which matures in 2020,


•	the Revolver Loan (July 2015), which matures in 2020, assuming the one-year extension is exercised,


•	the Midland, Emporia Partners, Samsonite, and HealthSpring property mortgage loans, all of which mature in 2023,


•	the Highway 94 property mortgage loan, which matures in 2024, and


•	the AIG loan, which matures in 2029.