Borrowings

9 Months Ended

Sep. 30, 2020

The following table presents the Company’s mortgage and other notes payable (dollars in thousands):


				September 30, 2020 (Unaudited)				December 31, 2019
	Recourse vs. Non-Recourse	Final Maturity	Contractual Interest Rate(1)	Principal Amount(2)		Carrying Value(2)		Principal Amount(2)		Carrying Value(2)
Mortgage notes payable, net
Watermark Aqua Portfolio
Denver, CO	Non-recourse	Feb 2021	LIBOR + 2.92%	$	20,350	$	20,334	$	20,547	$	20,500
Frisco, TX	Non-recourse	Mar 2021	LIBOR + 3.04%	18,882		18,867		19,170		19,127
Milford, OH	Non-recourse	Sep 2026	LIBOR + 2.68%	18,760		18,407		18,760		18,357
Rochester Portfolio
Rochester, NY	Non-recourse	Feb 2025	4.25%	19,907		19,824		20,228		20,131
Rochester, NY(3)	Non-recourse	Aug 2027	LIBOR + 2.34%	101,224		100,352		101,224		100,267
Rochester, NY	Non-recourse	Aug 2021	LIBOR + 2.90%	12,800		12,493		12,800		12,232
Arbors Portfolio(4)
Various locations	Non-recourse	Feb 2025	3.99%	87,756		86,920		89,026		88,020
Watermark Fountains Portfolio(5)
Various locations	Non-recourse	Jun 2022	3.92%	388,680		387,492		392,269		390,508
Various locations	Non-recourse	Jun 2022	5.56%	73,714		73,406		74,208		73,750
Winterfell Portfolio(6)
Various locations	Non-recourse	Jun 2025	4.17%	624,513		609,210		632,024		614,415
Avamere Portfolio(7)
Various locations	Non-recourse	Feb 2027	4.66%	70,718		70,233		71,464		70,922
Subtotal mortgage notes payable, net				$	1,437,304	$	1,417,538	$	1,451,720	$	1,428,229
Other notes payable
Oak Cottage
Santa Barbara, CA	Non-recourse	Feb 2022	6.00%	3,914		3,915		3,693		3,693
Subtotal other notes payable, net				$	3,914	$	3,915	$	3,693	$	3,693
Total mortgage and other notes payable, net				$	1,441,218	$	1,421,453	$	1,455,413	$	1,431,922

_______________________________________

(1)Floating rate borrowings are comprised of $172.0 million principal amount at one-month LIBOR.

(2)The difference between principal amount and carrying value of mortgage notes payable is attributable to deferred financing costs, net for all borrowings, other than the Winterfell portfolio which is attributable to below market debt intangibles.

(3)Comprised of seven individual mortgage notes payable secured by seven healthcare real estate properties, cross-collateralized and subject to cross-default.

(4)Comprised of four individual mortgage notes payable secured by four healthcare real estate properties, cross-collateralized and subject to cross-default.

(5)Includes $388.7 million principal amount of fixed rate borrowings, secured by 14 healthcare real estate properties, cross-collateralized and subject to cross-default, as well as a supplemental financing totaling $73.7 million of principal, secured by seven healthcare real estate properties, cross-collateralized and subject to cross-default.

(6)Comprised of 32 individual mortgage notes payable secured by 32 healthcare real estate properties, cross-collateralized and subject to cross-default.

(7)Comprised of five individual mortgage notes payable secured by five healthcare real estate properties, cross-collateralized and subject to cross-default.

The following table presents future scheduled principal payments on mortgage and other notes payable based on final maturity (dollars in thousands):


October 1 to December 31, 2020	$	9,377
Years Ending December 31:
2021	76,127
2022	466,725
2023	19,056
2024	19,778
Thereafter	850,155
Total	$	1,441,218

As of September 30, 2020, the tenant for the Arbors portfolio failed to remit rent timely and comply with other contractual terms of its lease agreement, which resulted in a default under the tenant’s lease, which in turn, resulted in a default under the mortgage notes collateralized by the properties. The Company is currently in discussions with the tenant regarding the lease default.

In response to the operational challenges resulting from the COVID-19 pandemic, the Company entered into forbearance agreements effective May 1, 2020 to defer up to 90 days of contractual debt service for borrowings on properties within the Aqua, Rochester, Arbors, Winterfell and Fountains portfolios. The aggregate outstanding principal amount of these borrowings totaled $1.3 billion as of September 30, 2020. The deferred debt service must be repaid over the 12 months following the forbearance period with no additional interest or penalties incurred by the Company, subject to satisfaction of certain conditions. The deferral of payments ended on August 1, 2020 and the Company has resumed remitting debt service, together with the deferred debt service, on these mortgage notes payable. As a result, these borrowings remain in technical default and are subject to the terms of the forbearance agreements until all deferred debt service is repaid.

The Company entered into an additional forbearance agreement effective July 1, 2020 to defer up to 90 days of interest and 120 days of contractual principal payments for a mortgage note payable on a property within the Rochester portfolio. The forbearance agreement also temporarily waives financial covenants under the mortgage note, which the property has failed to maintain as of September 30, 2020. The outstanding principal amount of the mortgage note payable was $19.9 million as of September 30, 2020. The deferred debt service must be repaid over the 12 months following the forbearance period with no additional interest or penalties incurred by the Company, subject to satisfaction of certain conditions.

Line of Credit - Related Party

In October 2017, the Company obtained a revolving line of credit from an affiliate of Colony Capital, the Sponsor, for up to $15.0 million at an interest rate of 3.5% plus LIBOR (the “Sponsor Line”). The Sponsor Line had an initial one year term, with an extension option of six months.

In November 2017, the borrowing capacity under the Sponsor Line was increased to $35.0 million. In March 2018, the Sponsor Line maturity date was extended through December 2020, and in May 2019, the maturity date was further extended through December 2021. In July 2020, the maturity date was extended through December 2022.

In April 2020, the Company borrowed $35.0 million under the Sponsor Line to improve its liquidity position as a result of the COVID-19 pandemic. Interest expense on the Company’s consolidated statements of operations includes $0.3 million and $0.6 million related to the Sponsor Line for the three and nine months ended September 30, 2020, respectively.