Debt Obligations

9 Months Ended

Sep. 30, 2019

Debt obligations consist of the following (dollars in thousands):


	September 30, 2019		December 31, 2018
Mortgages payable	$	851,147	$	778,106
Junior subordinated notes	37,400		37,400
Credit facility	3,600		—
Deferred financing costs	(6,962)		(6,646)
Total debt obligations, net of deferred costs	$	885,185	$	808,860

Mortgages Payable

During the nine months ended September 30, 2019, the Company obtained the following mortgage debt in connection with the acquisition of the following properties (dollars in thousands):


Location	Closing Date	Acquisition Mortgage Debt		Interest Rate		Interest only period	Maturity Date
Kannapolis, NC	3/12/19	$	33,347	3.52	%	—	3/1/2052
Birmingham, AL	5/7/19	32,250		4.19	%	72 months	6/1/2029
Auburn, AL	8/8/19	14,500		3.79	%	48 months	9/1/2031
		$	80,097

On September 6, 2019, the Company obtained a $1,100,000 supplemental loan on its Macon, GA property. The loan bears interest at a rate of 4.21% and matures February 1, 2026.

The Company has a construction loan financing a project with 402 units, which property is in lease-up. Information regarding this loan at September 30, 2019 is set forth below (dollars in thousand):

Location

Closing Date

Maximum Loan Amount

Amount outstanding

Interest Rate

Maturity Date

Extension Option

West Nashville,TN

6/2/2017

47,426

44,848

30 day LIBOR + 2.85%

6/2/2022

N/A

In the three months ended September 30, 2019, $569,000 of interest was incurred on this loan, of which $165,000 was capitalized. In the nine months ended September 30, 2019, $1,528,000 of interest was incurred on this loan, of which $860,000 was capitalized.

On September 19, 2019, the Company refinanced a $27,000,000 adjustable rate loan on its San Antonio, TX property with a fixed rate loan in the amount of $27,000,000. The mortgage debt bears interest at a fixed rate of 3.64%, matures in October 2029, is interest only for five years, amortizes on a 30 year schedule with a balloon payment of the unpaid principal balance and interest due at maturity.

Credit Facility

The Company entered into a credit facility dated April 18, 2019, as subsequently amended, with an affiliate of Valley National Bank. The facility allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $10,000,000 to facilitate the acquisition of multi-family properties, and is secured by the cash available in certain cash accounts maintained by the Company at Valley National Bank. The facility matures April 2021 and bears an adjustable interest rate of 50 basis points over the prime rate, with a floor of 5%. The interest rate in effect as of September 30, 2019 is 5%. There is an unused facility fee of 0.25% per annum on the difference between the outstanding loan balance and maximum amount then available under the facility.

At September 30, 2019, the outstanding balance on the facility was $3,600,000. Interest expense for the three and nine months ended September 30, 2019, which includes amortization of deferred costs, was $57,000 and $153,000, respectively. At November 1, 2019, the outstanding balance on the credit facility was $2,800,000.

Junior Subordinated Notes

At September 30, 2019 and December 31, 2018, the Company's junior subordinated notes had an outstanding principal balance of $37,400,000, before deferred financing costs of $342,000 and $357,000, respectively. At September 30, 2019, the interest rate on the outstanding balance is three month LIBOR + 2.00% or 4.26%.

The junior subordinated notes require interest - only payments through the maturity date of April 30, 2036, at which time repayment of the outstanding principal and unpaid interest become due. Interest expense for the three months ended September 30, 2019 and 2018, which includes amortization of deferred costs, was $438,000 and $416,000, respectively, and for the nine months ended September 30, 2019 and 2018 was $1,326,000 and $1,159,000, respectively.