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Mortgage Notes Payable, Net
 3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Mortgage Notes Payable, Net Mortgage Notes Payable, Net
The following table reflects the Company’s mortgage notes payable as of March 31, 2020 and December 31, 2019:
 
 
 
 
Outstanding Loan Amount as of
 
Effective Interest Rate as of
 
 
 
 
 
Portfolio
 
Encumbered Properties (1)
 
March 31,
2020
 
December 31, 2019
 
March 31,
2020
 
December 31, 2019
 
Interest Rate
 
Maturity
 
 
 
 
 
(In thousands)
 
(In thousands)
 
 
 
 
 
 
 
 
 
Palm Valley Medical Plaza - Goodyear, AZ
 
1
 
$
3,084

 
$
3,112

 
4.15
%
 
4.15
%
 
Fixed
 
Jun. 2023
 
Medical Center V - Peoria, AZ
 
1
 
2,860

 
2,884

 
4.75
%
 
4.75
%
 
Fixed
 
Sep. 2023
 
Fox Ridge Bryant - Bryant, AR
 
1
 
7,246

 
7,283

 
3.98
%
 
3.98
%
 
Fixed
 
May 2047
 
Fox Ridge Chenal - Little Rock, AR
 
1
 
16,620

 
16,695

 
3.98
%
 
3.98
%
 
Fixed
 
May 2049
 
Fox Ridge North Little Rock - North Little Rock, AR
 
1
 
10,312

 
10,359

 
3.98
%
 
3.98
%
 
Fixed
 
May 2049
 
Capital One MOB Loan
 
35
 
378,500

 
378,500

 
3.66
%
 
3.66
%
 
Fixed
3 
Dec. 2026
 
Multi-Property CMBS Loan
 
21
 
118,700

 
118,700

 
4.60
%
 
4.60
%
 
Fixed
 
May 2028
 
Shiloh - Illinois (4)
 
1
 
13,883

 
—

 
4.34
%
 
—
%
 
Fixed
 
March 2026
 
Gross mortgage notes payable
 
62
 
551,205

 
537,533

 
3.91
%
 
3.90
%
(2) 
 
 
 
 
Deferred financing costs, net of accumulated amortization (5)
 
 
 
(7,612
)
 
(7,718
)
 
 
 
 
 
 
 
 
 
Mortgage premiums and discounts, net
 
 
 
(1,516
)
 
(1,531
)
 
 
 
 
 
 
 
 
 
Mortgage notes payable, net
 
 
 
$
542,077

 
$
528,284

 
 
 
 
 
 
 
 
 
_____________
(1) Does not include real estate assets mortgaged to secure advances under the Fannie Mae Master Credit Facilities or eligible unencumbered real estate assets comprising the borrowing base of the Credit Facility (as defined below). The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the real estate assets comprising the borrowing base have been pledged for the benefit of the lenders thereunder (see Note 5 — Credit Facilities for additional details).
(2) Calculated on a weighted average basis for all mortgages outstanding as of March 31, 2020 and December 31, 2019. For the LIBOR based loans, LIBOR in effect at the balance sheet date was utilized. For the Capital One MOB Loan, the effective rate does not include the effect of amortizing the amount paid to terminate the previous pay-fixed swap. See Note 7 — Derivatives and Hedging Activities for additional details.
(3) Variable rate loan, based on 30-day LIBOR, which is fixed as a result of entering into “pay-fixed” interest rate swap agreements . In connection with the amendment to this loan in December 2019 (see additional details below), the Company terminated the previous interest rate swap agreements and entered into new interest rate swap agreements (see Note 7 — Derivatives and Hedging Activities for additional details).
(4) The Company assumed this fixed rate mortgage when it acquired a property during the three months ended March 31, 2020.
(5) Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close.
As of March 31, 2020, the Company had pledged $0.9 billion in total real estate investments, at cost, as collateral for its $0.6 billion of gross mortgage notes payable. This real estate is not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable secured by these properties. The Company makes payments of principal and interest, or interest only, depending upon the specific requirements of each mortgage note, on a monthly basis.
Some of the Company’s mortgage note agreements require compliance with certain property-level financial covenants, including debt service coverage ratios. As of March 31, 2020, the Company was in compliance with these financial covenants.
See Note 5 — Credit Facilities - Future Principal Payment and LIBOR Transition for schedule of principal payment requirements of the Company’s Mortgage Notes and Credit Facilities and discussion of the expected cessation of LIBOR publication.