Debt Obligations

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt Obligations

Debt Obligations

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

	March 31, 2023		December 31, 2022
Mortgages payable	$	428,475	$	407,958
Junior subordinated notes	37,400		37,400
Credit facility	—		19,000
Deferred financing costs	(4,927)		(4,941)
Total debt obligations, net of deferred costs	$	460,948	$	459,417

Mortgages Payable

At March 31, 2023, the weighted average interest rate on the Company's mortgages payable was 4.02% and the weighted average remaining term to maturity is 7.8 years. For the three months ended March 31, 2023 and 2022, interest expense, which includes amortization of deferred financing costs, was $4,546,000 and $1,763,000, respectively.

On February 24, 2023, we obtained mortgage debt of $21,173,000 on our Silvana Oaks- North Charleston, SC multi-family property, such mortgage debt matures in March 2033, bears an interest rate of 4.55% and is interest only for the term of the mortgage.

Credit Facility

The Company's amended credit facility with an affiliate of Valley National Bank ("VNB"), allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $60,000,000. The facility can be used to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi-family properties and for operating expenses (i.e.,working capital (including dividend payments)); provided that no more than $25,000,000 may be used for operating expenses. The facility is secured by the cash available at VNB and the Company's pledge of the interests in the entities that own the properties. The interest rate in effect as of March 31, 2023 is 8.00%. There is an unused facility fee of 0.25% per annum. At March 31, 2023, the Company is in compliance in all material respects with its obligations under the facility.

At March 31, 2023, there was no outstanding balance on the facility and at December 31, 2022 the outstanding balance was $19,000,000. At March 31, 2023 and December 31, 2022, $60,000,000 and $41,000,000, respectively, was available to be borrowed. At May 1, 2023, there was no outstanding balance on the facility and $60,000,000 available to be borrowed. Interest expense for the three months ended March 31, 2023 and 2022, which includes amortization of deferred financing costs and unused fees, was $300,000 and $45,000, respectively. Deferred financing costs of $445,000 and $498,000, are recorded in on the Consolidated balance sheets at March 31, 2023 and December 31, 2022, respectively.

Junior Subordinated Notes

At March 31, 2023 and December 31, 2022, the outstanding principal balance of the Company's junior subordinated notes was $37,400,000, before deferred financing costs of $272,000 and $277,000, respectively. The interest rate on the outstanding balance resets quarterly and is based on three months LIBOR + 2.00%. The rate in effect at March 31, 2023 and 2022 was 6.80% and 2.30%, respectively. The notes mature April 30, 2036. The interest rate that will be in effect for the three months ending July 31, 2023 is 7.30%.

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 March 31, 2023 and 2022, which includes amortization of deferred financing costs, was $637,000 and $212,000, respectively.