Indebtedness

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Indebtedness

Indebtedness

Our principal debt obligations at June 30, 2023 were: (1) $240,000 of outstanding borrowings under our $750,000 unsecured revolving credit facility; (2) $2,212,000 aggregate outstanding principal amount of senior unsecured notes; and (3) $108,120 aggregate outstanding principal amount of mortgage notes.

Our $750,000 revolving credit facility is governed by a credit agreement, or our credit agreement, with a syndicate of institutional lenders that includes a feature under which the maximum aggregate borrowing availability may be increased to up to $1,950,000 in certain circumstances. Our revolving credit facility is available for general business purposes, including acquisitions. In June 2023, we exercised our option to extend the maturity date of our revolving credit facility by six months to January 31, 2024 and paid an extension fee of $469. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity and no principal repayment is due until maturity.

In March 2023, we amended our credit agreement to, among other things, replace LIBOR with the secured overnight financing rate, or SOFR, as the benchmark interest rate for calculating interest payable on the amounts outstanding under our revolving credit facility. We are required to pay interest at a rate of SOFR plus a premium, which was 145 basis points per annum at June 30, 2023, on the amount outstanding under our revolving credit facility. We also pay a facility fee on the total amount of lending commitments under our revolving credit facility, which was 30 basis points per annum at June 30, 2023. Both the interest rate premium and facility fee are subject to adjustment based upon changes to our credit ratings. As of June 30, 2023 and December 31, 2022, the annual interest rate payable on borrowings under our revolving credit facility was 6.6% and 5.4%, respectively. The weighted average annual interest rate for borrowings under our revolving credit facility was 6.5% and 6.2% for the three and six months ended June 30, 2023, respectively, and 2.4% for both the three and six months ended June 30, 2022. As of June 30, 2023 and July 25, 2023, we had $240,000 and $230,000, respectively, outstanding under our revolving credit facility, and $510,000 and $520,000, respectively, available for borrowing.

Our credit agreement and senior unsecured notes indentures and their supplements provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes The RMR Group LLC, or RMR, ceasing to act as our business and property manager. Our credit agreement and senior unsecured notes indentures and their supplements also contain covenants, including covenants that restrict our ability to incur debts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to make distributions under certain circumstances. We believe we were in compliance with the terms and conditions of the respective covenants under our credit agreement and senior unsecured notes indentures and their supplements at June 30, 2023.

Mortgage Note Issuances

During the six months ended June 30, 2023, we issued the following four mortgage notes with an aggregate principal balance of $108,120 and a weighted average interest rate of 7.863%:

Issuance Date	Principal Balance		Interest Rate	Maturity
May 2023	$	30,680	7.210%	7/1/2033
June 2023	26,340		8.139%	7/1/2028
June 2023	42,700		8.272%	7/1/2028
June 2023	8,400		7.305%	7/1/2033
Total / Weighted Average	$	108,120	7.863%

Mortgage Note Repayment

In June 2023, we repaid at maturity, a mortgage note secured by one property with an outstanding principal balance of $50,000 and an annual interest rate of 3.70%.

At June 30, 2023, four of our properties with a net book value of $153,078 were encumbered by mortgage notes with an aggregate principal balance of $108,120. Our mortgage notes are non-recourse, subject to certain limited exceptions and do not contain any material financial covenants.