Non-Recourse Secured Debt, Net

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Non-Recourse Secured Debt, Net

Non-Recourse Secured Debt, Net

Non-recourse secured debt, net is collateralized by the assignment of real estate properties. For a list of our encumbered properties, see Schedule III — Real Estate and Accumulated Depreciation. As of December 31, 2021, the weighted-average interest rate for our total non-recourse secured debt was 3.8% (fixed-rate and variable-rate non-recourse secured debt were 3.9% and 3.5%, respectively), with maturity dates ranging from February 2022 to April 2039. Subsequent to December 31, 2021 and through the date of this Report, we (i) prepaid a non-recourse mortgage loan with a principal balance of $36.2 million (in connection with a disposition) and (ii) repaid $22.3 million of principal outstanding on a non-recourse mortgage loan (Note 15).

Financing Activity During 2021

During the year ended December 31, 2021, we obtained the following non-recourse mortgage loans and construction loans in connection with certain student housing properties (dollars in thousands):

Property Location(s)	Date Obtained	Interest Rate	Rate Type	Maturity Date	Drawdowns (a)		Loan Amount (a)
Malaga, Spain (b)	3/31/2021	2.5%	Variable	12/31/2023	$	27,261	$	27,261
Swansea, United Kingdom (c)	4/6/2021	6.4%	Variable	10/5/2023	28,162		56,577
Porto, Portugal (b) (d)	4/30/2021	2.8%	Fixed	4/30/2025	16,432		18,123
Pamplona, Spain (b)	9/30/2021	2.5%	Variable	12/31/2023	19,684		19,684
Bilbao, Spain (b)	11/11/2021	2.5%	Variable	12/31/2023	32,088		32,088
							$	153,733

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(a)Amounts are based on the exchange rate of the euro or British pound sterling, as applicable, on the date of the transactions.

(b)Represents a non-recourse mortgage loan.

(c)Represents a construction loan for a student housing development project, which we currently expect to be completed in the third quarter of 2022. This loan has a one-year extension option

(d)At closing, we drew down the first tranche of the loan of $16.4 million, which bears a fixed interest rate of 2.8%. The second tranche of $1.7 million is undrawn as of December 31, 2021, and would bear a variable interest rate equal to the Euro Interbank Offering Rate plus 2.5% when drawn.

Repayments

On September 3, 2021, we repaid a non-recourse mortgage loans of $83.3 million with an interest rate of 2.3% in connection with the disposition of two student housing operating properties encumbered by the loan (Note 13). We recognized a net loss on extinguishment of debt of $1.5 million on this prepayment, which is included within Other gains and (losses) on our consolidated statements of income.

On October 29, 2021, we prepaid a non-recourse mortgage loan of $8.3 million with an interest rate of 3.9%, in connection with the disposition of a retail facility encumbered by the loan (Note 13).

On December 29, 2021, we prepaid a non-recourse mortgage loan of $6.8 million with an interest rate of 5.0%, in connection with the disposition of a vacant industrial facility encumbered by the loan (Note 13). We recognized a net loss on extinguishment of debt of $0.5 million on this prepayment, which is included within Other gains and (losses) on our consolidated statements of income.

During the year ended December 31, 2021, we repaid four other non-recourse mortgage loans at maturity with an aggregate principal balance of approximately $56.3 million and a weighted-average interest rate of 4.2%.

Interest Paid

Interest paid totaled $42.2 million, $39.4 million, and $43.4 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Scheduled Debt Principal Payments

Scheduled debt principal payments as of December 31, 2021, during each of the next five calendar years and thereafter are as follows (in thousands):

Years Ending December 31,	Total
2022	$	220,270
2023	394,582
2024	196,730
2025	341,730
2026	90,891
Thereafter through 2039	11,242
Total principal payments	1,255,445
Unamortized deferred financing costs	(6,749)
Unamortized premium, net	4,349
Total	$	1,253,045

Certain amounts in the table above are based on the applicable foreign currency exchange rate at December 31, 2021.

The carrying value of our Non-recourse secured debt, net, increased by $38.1 million in the aggregate from December 31, 2020 to December 31, 2021, reflecting the impact of exchange rate fluctuations during the same period (Note 2).

Covenants

Our non-recourse mortgage loan agreements include customary financial maintenance covenants that require us to maintain certain ratios and benchmarks at the end of each quarter. Our compliance with such covenants depends on many factors that could be impacted by current or future economic conditions, including the adverse impact of the COVID-19 pandemic. Other than the breaches discussed below, we were in compliance with our covenants at December 31, 2021.

As of December 31, 2021, we were in breach of a non-recourse mortgage loan encumbering a net-leased property for non-payment of a $4.0 million scheduled payment of mortgage principal (principal balance of $52.6 million as of December 31, 2021). The lender has the right to call the loan and apply any restricted cash towards the repayment of the loan. As of the date of this Report, the lender has not enforced this right and we are in separate negotiations with the lender.