Mortgage Notes Payable, Net

3 Months Ended

Mar. 31, 2022

The following table reflects the Company’s mortgage notes payable as of March 31, 2022 and December 31, 2021:


		Outstanding Loan Amount as of				Effective Interest Rate (1) as of
Portfolio	Encumbered Properties (1)	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		Interest Rate		Maturity
		(In thousands)		(In thousands)
Palm Valley Medical Plaza - Goodyear, AZ (4)	1	$	2,848	$	2,879	4.15	%	4.15	%	Fixed		Jun. 2023
Medical Center V - Peoria, AZ	—	—		2,684		—	%	4.75	%	Fixed		Sep. 2023
Fox Ridge Bryant - Bryant, AR	1	6,937		6,977		3.98	%	3.98	%	Fixed		May 2047
Fox Ridge Chenal - Little Rock, AR	1	15,930		16,024		2.95	%	2.95	%	Fixed		May 2049
Fox Ridge North Little Rock - North Little Rock, AR	1	9,884		9,943		2.95	%	3.95	%	Fixed		May 2049
Capital One MOB Loan	41	378,500		378,500		3.71	%	3.71	%	Fixed	(2)	Dec. 2026
Multi-Property CMBS Loan	21	118,700		118,700		4.60	%	4.60	%	Fixed		May 2028
Shiloh - Illinois	1	13,305		13,384		4.34	%	4.34	%	Fixed		March 2026
BMO CMBS Loan	9	42,750		42,750		2.89	%	2.89	%	Fixed		Dec. 2031
Gross mortgage notes payable	76	588,854		591,841		3.82	%	3.82	%
Deferred financing costs, net of accumulated amortization (3)		(5,835)		(6,186)
Mortgage premiums and discounts, net		(1,308)		(1,416)
Mortgage notes payable, net		$	581,711	$	584,239

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(1)Calculated on a weighted average basis for all mortgages outstanding as of March 31, 2022 and December 31, 2021. 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.

(2)Variable rate loan, based on 30-day LIBOR, which is fixed as a result of entering into “pay-fixed” interest rate swap agreements. The Company designates its “pay-fixed” interest rate swaps against all 30-day LIBOR debt.

(3) 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.

(4)This mortgage was repaid in full subsequent to March 31, 2022, for additional information see Note 17 — Subsequent Events.

As of March 31, 2022, 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, 2022, the Company was in compliance with these financial covenants.

See Note 5 — Credit Facilities - Future Principal Payment and LIBOR Transition for a schedule of principal payment requirements of the Company’s Mortgage Notes and Credit Facilities and discussion of the expected cessation of LIBOR publication.