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Indebtedness
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block] Indebtedness
    Mortgage Notes Payable

Financing of real estate assets

During the years ended December 31, 2021 and 2020, the Company partially financed existing and newly acquired real estate assets with mortgage debt as shown in the following table:
DateProperty
Initial principal amount
(in thousands)
Fixed/Variable rateRateMaturity date
2021:
4/15/2021Midway Market$10,150 Fixed3.06 %5/1/2031
6/30/2021The Ellison47,991 VariableL + 1503/31/2022
7/8/2021Alleia at Presidio35,700 Fixed2.50 %8/1/2026
9/14/2021The Anson56,440 Fixed2.69 %10/1/2031
9/16/2021The Kingson53,900 Fixed2.35 %10/1/2026
9/17/2021Chestnut Farm51,800 VariableL + 1506/17/2022
9/24/2021Citi Lakes B-Note10,420 Fixed3.85 %8/1/2029
10/21/2021Aldridge at Town Village B-Note3,670 Fixed3.46 %11/1/2024
10/21/2021Retreat at Greystone B-Note7,274 Fixed3.47 %12/1/2024
11/2/2021Woodstock Crossing5,300 Fixed2.89 %12/1/2026
12/8/2021Fairview Market7,100 Fixed2.87 %12/15/2028
$289,745 
2020:
1/22/2020251 Armour Yards$3,522 Fixed4.50 %1/22/2025
1/29/2020Wakefield Crossing7,891 Fixed3.66 %2/1/2032
3/19/2020Morrocroft Centre70,000 Fixed3.40 %4/10/2033
4/23/2020Horizon at Wiregrass52,000 Fixed2.90 %5/1/2030
4/30/2020Parkside at the Beach45,037 Fixed2.95 %5/1/2030
11/2/2020The Blake44,435 Fixed2.82 %5/1/2030
12/15/2020The Menlo47,000 Fixed2.68 %1/1/2031
$269,885 












    
    
Repayments and refinancings

The following table summarizes our mortgage debt refinancing and repayment activity for the years ended December 31, 2021 and 2020:
DateProperty
Previous balance (in millions)
Previous interest rate / spread over 1 month LIBOR
Loan refinancing or prepayment costs expensed (in thousands)
New balance (in millions)
New interest rate
Total deferred loan costs subsequent to refinancing (in thousands)
2021:
2/28/2021Village at Baldwin Park$69.4 3.59 %$6 $69.4 3.27%$923 
7/19/2021Vineyards32.3 3.68 %1 — — — 
7/29/2021Galleria 755.0 4.25 %166 — — — 
7/29/2021150 Fayetteville112.6 4.27 %— — — — 
7/29/2021Capitol Towers121.5 4.60 %— — — — 
7/29/2021CAPTRUST82.7 3.61 %— — — — 
7/29/2021Morrocroft Centre70.0 3.40 %— — — — 
8/18/2021The Ellison48.0 L + 15096 48.0 2.52 %400 
8/30/2021Woodstock Crossing2.8 4.71 %— — — — 
9/8/2021Armour Yards38.9 4.10 %424 — — — 
9/8/2021251 Armour Yards6.1 4.50 %— — — — 
9/24/2021Sorrel30.2 3.44 %232 47.7 2.54 %1,787 
11/1/2021Champions Village27.4 L + 300— — — — 
11/12/2021Brookwood Center29.2 4.71 %— — — — 
$676.1 $925 $165.1 $3,110 
2020:
1/3/2020Ursa$31.4 L + 300$— $— — $— 
6/25/2020CityPark View19.8 3.27 %1,314 29.0 2.75 %314 
6/29/2020Aster at Lely Resort30.7 3.84 %293 50.4 2.95 %2,777 
6/29/2020Avenues at Northpointe26.0 3.16 %166 33.5 2.79 %1,247 
6/30/2020Avenues at Cypress20.5 3.43 %1,607 28.4 2.96 %336 
6/30/2020Venue at Lakewood Ranch27.8 3.55 %2,457 36.6 2.99 %384 
6/30/2020Crosstown Walk29.9 3.90 %248 46.5 2.92 %2,841 
6/30/2020Summit Crossing II13.1 4.49 %779 20.7 L + 278136 
7/10/2020Citrus Village28.5 3.65 %704 40.9 2.95 %522 
7/31/2020Village at Baldwin Park70.1 4.16 %16 70.1 3.59 %864 
11/3/2020SoL35.2 4.71 %— — — — 
11/3/2020Stadium Village44.5 3.80 %— — — — 
11/3/2020Knightshade47.1 4.09 %— — — — 
11/3/2020North by Northwest30.5 4.02 %2,168 — — — 
11/3/2020The Tradition30.0 L + 375300 — — — 
11/3/2020The Bloc29.0 L + 35573 — — — 
11/12/2020Avenues at Creekside38.1 L + 160381 — — — 
$552.2 $10,506 $356.1 $9,421 
The following table summarizes our mortgage notes payable at December 31, 2021:
Fixed rate mortgage debt:
Principal balances due (in thousands)
Weighted-average interest rateWeighted average remaining life (years)
Residential properties$1,553,245 3.39 %8.1
New Market Properties 572,651 3.96 %6.4
Preferred Office Properties164,506 4.35 %16.1
Total fixed rate mortgage debt$2,290,402 3.60 %8.3
Variable rate mortgage debt:
Residential properties$72,500 1.98 %2.8
New Market Properties 19,750 2.16 %4.6
Total variable rate mortgage debt$92,250 2.02 %3.2
Total mortgage debt:
Residential properties$1,625,745 3.32 %7.9
New Market Properties 592,401 3.90 %6.3
Preferred Office Properties164,506 4.35 %16.1
Total principal amount2,382,652 3.54 %8.1
Deferred loan costs(35,400)
Mark to market loan adjustment(3,888)
Mortgage notes payable, net$2,343,364 

The mortgage note secured by our Independence Square property is a seven year term with an anticipated repayment date of September 1, 2022. If the Company elects not to pay its principal balance at the anticipated repayment date, the term will be extended for an additional five years, maturing on September 1, 2027. The interest rate from September 1, 2022 to September 1, 2027 will be the greater of (i) the Initial Interest Rate of 3.93% plus 200 basis points or (ii) the yield on the seven year U.S. treasury security rate plus approximately 400 basis points.

As of December 31, 2021, the weighted-average remaining life of deferred loan costs related to the Company's mortgage indebtedness was approximately 8.7 years. Our mortgage notes have maturity dates between June 17, 2022 and June 1, 2054.
    
    Credit Facility

The Company has a credit facility, or Credit Facility, with KeyBank National Association, or KeyBank, which defines a revolving line of credit, or Revolving Line of Credit, which is used to fund investments, capital expenditures, dividends (with consent of KeyBank), working capital and other general corporate purposes on an as-needed basis. On March 23, 2018, the maximum borrowing capacity on the Revolving Line of Credit was increased to $200 million pursuant to an accordion feature. The accordion feature permits the maximum borrowing capacity to be expanded or contracted without amending any further terms of the instrument. On December 12, 2018, the Fourth Amended and Restated Credit Agreement, or the Amended and Restated Credit Agreement, was amended to extend the maturity to December 12, 2021, with an option to extend the maturity date to December 12, 2022, subject to certain conditions described therein. The Revolving Line of Credit accrues interest at a variable rate of one month LIBOR plus an applicable margin of 2.50% to 3.50% per annum, depending upon the Company’s leverage ratio. The weighted average interest rate for the Revolving Line of Credit was 3.62% for the year ended December 31, 2021. The Amended and Restated Credit Agreement also reduced the commitment fee on the average daily unused portion of the Revolving Line of Credit to 0.25% or 0.30% per annum, depending upon the Company’s outstanding Credit Facility balance.
On December 20, 2019, the Company entered into a $70.0 million interim term loan with KeyBank, or the 2019 Term Loan, to partially finance the acquisition of Morrocroft Centre, an office building located in Charlotte, North Carolina. The 2019 Term Loan accrued interest at a rate of LIBOR plus 1.7% per annum. The 2019 Term Loan was repaid in conjunction with the closing of permanent mortgage financing for Morrocroft Centre on March 19, 2020.
The Fourth Amended and Restated Credit Agreement, as amended on May 4, 2021, contains certain affirmative and negative covenants, including negative covenants that limit or restrict secured and unsecured indebtedness, mergers and fundamental changes, investments and acquisitions, liens and encumbrances, dividends, transactions with affiliates, burdensome agreements, changes in fiscal year and other matters customarily restricted in such agreements. The amount of dividends that may be paid out by the Company is restricted to a maximum of 100% of AFFO for the trailing four quarters without the lender's consent; solely for purposes of this covenant, AFFO is calculated as earnings before interest, taxes, depreciation and amortization expense, plus reserves for capital expenditures, less normally recurring capital expenditures, less consolidated interest expense.
As of December 31, 2021, the Company was in compliance with all covenants related to the Revolving Line of Credit, as shown in the following table:
Covenant (1)
RequirementResult
Net worthMinimum $1.3 billion
(2)
$1.7 billion
(2)
Debt yieldMinimum 8.75%
(3)
9.8%
Payout ratioMaximum 100%
(4)
90.6%
Total leverage ratioMaximum 65%58.0%
Debt service coverage ratioMinimum 1.50x
(5)
2.10x

(1) All covenants are as defined in the credit agreement for the Revolving Line of Credit.
(2) The minimum net worth covenant decreased to a minimum of $1.3 billion on July 29, 2021 with the office properties closing.
(3) The minimum debt yield covenant increases to a minimum of 9.0% on May 5, 2023.
(4) Calculated on a trailing four-quarter basis. For the period ended December 31, 2021, the maximum dividends and distributions allowed under this covenant was approximately $175.9 million.
(5) Minimum of 1.50x if AFFO payout ratio is less than or equal to 95% and 1.70x if greater than 95%.

Loan fees and closing costs for the establishment and subsequent amendments of the Credit Facility are amortized utilizing the straight line method over the life of the Credit Facility. At December 31, 2021, unamortized loan fees and closing costs for the Credit Facility were approximately $1.8 million, which will be amortized over a remaining loan life of approximately 2.4 years. Loan fees and closing costs for the mortgage debt on the Company's properties are amortized utilizing the effective interest rate method over the lives of the loans.

    Acquisition Facility

On February 28, 2017, the Company entered into a credit agreement, or Acquisition Credit Agreement, with Freddie Mac through KeyBank to obtain an acquisition revolving credit facility, or Acquisition Facility, with a maximum borrowing capacity of $200 million. The purpose of the Acquisition Facility is to finance acquisitions. On March 25, 2019, the maximum borrowing capacity was decreased to $90 million by agreement between the Company and KeyBank. The Acquisition Facility accrues interest at a variable rate of one month LIBOR plus a margin of between 1.75% per annum and 2.20% per annum, depending on the type of assets acquired and the resulting property debt service coverage ratio. The Acquisition Facility has a maturity date of March 1, 2022 and has two one-year extension options, subject to certain conditions described therein.
    Interest Expense

Interest expense, including amortization of deferred loan costs was:
Years ended December 31,
(In thousands)202120202019
Residential properties$55,346 $60,676 $62,455 
New Market Properties25,654 26,379 24,566 
Preferred Office Properties18,987 26,939 22,869 
Interest paid to real estate loan participants— — 110 
Total99,987 113,994 110,000 
Credit Facility and Acquisition Facility2,427 4,564 1,964 
Interest Expense$102,414 $118,558 $111,964 
    Future Principal Payments
The Company’s estimated future principal payments due on its debt instruments as of December 31, 2021 were:
Period
Future principal payments
(in thousands)
2022$116,739 
202381,850 
2024300,323 
202556,875 
2026337,740 
Thereafter1,489,125 
Total$2,382,652