Mortgage Notes Payable, Net

6 Months Ended

Jun. 30, 2022

The Company’s mortgage notes payable, net as of June 30, 2022 and December 31, 2021 consisted of the following:


		Outstanding Loan Amount as of				Effective Interest Rate as of
Portfolio	Encumbered Properties	June 30, 2022		December 31, 2021		June 30, 2022			Interest Rate	Maturity	Anticipated Repayment
		(In thousands)		(In thousands)
2019 Class A-1 Net Lease Mortgage Notes	102	$	117,931	$	118,231	3.83	%		Fixed	May 2049	May 2026
2019 Class A-2 Net Lease Mortgage Notes	108	120,338		120,644		4.52	%		Fixed	May 2049	May 2029
2021 Class A-1 Net-Lease Mortgage Notes	49	54,047		54,487		2.24	%		Fixed	May 2051	May 2028
2021 Class A-2 Net-Lease Mortgage Notes	47	93,353		94,113		2.83	%		Fixed	May 2051	May 2031
2021 Class A-3 Net-Lease Mortgage Notes	33	35,000		35,000		3.07	%		Fixed	May 2051	May 2028
2021 Class A-4 Net-Lease Mortgage Notes	35	55,000		55,000		3.65	%		Fixed	May 2051	May 2031
Total Net Lease Mortgage Notes	374	475,669		477,475

Stop & Shop	4	45,000		45,000		3.50	%		Fixed	Jan. 2030	Jan. 2030
Column Financial Mortgage Notes	365	706,197		715,000		3.79	%		Fixed	Aug. 2025	Aug. 2025
Bob Evans I	22	22,842		22,842		4.71	%		Fixed	Sep. 2037	Sep. 2027
Mortgage Loan II	12	210,000		210,000		4.25	%		Fixed	Jan. 2028	Jan. 2028
Mortgage Loan III	22	33,400		33,400		4.12	%		Fixed	Jan. 2028	Jan. 2028
Cottonwood Commons (4)	1	19,250		—		4.52	%		Fixed	Sep. 2023	Sep. 2023
The Marquis (4)	1	8,556		—		3.95	%		Fixed	May 2023	May 2023
Assumed Multi-Tenant Mortgage I (4)	3	16,700		—		4.68	%		Fixed	Sep. 2033	Sep. 2023
Assumed Multi-Tenant Mortgage II (4)	4	25,000		—		4.54	%		Fixed	Feb. 2024	Feb. 2024
Assumed Multi-Tenant Mortgage III (4)	3	31,300		—		3.70	%		Fixed	Apr. 2023	Apr. 2023
Assumed Multi-Tenant Mortgage IV (4)	4	28,387		—		3.90	%		Fixed	Apr. 2023	Apr. 2023
Assumed Multi-Tenant Mortgage V (4)	7	61,134		—		3.70	%		Fixed	Sep. 2023	Sep. 2023
The Plant (4)	1	123,000		—		3.87	%		Fixed	May 2033	May 2023
Gross mortgage notes payable	823	1,806,435		1,503,717		3.82	%	(1)
Deferred financing costs, net of accumulated amortization (2)		(36,990)		(38,672)
Mortgage premiums and (discounts), net (3)		(1,419)		(115)
Mortgage notes payable, net		$	1,768,026	$	1,464,930

__________

(1)Calculated on a weighted-average basis for all mortgages outstanding as of June 30, 2022.

(2)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 it is probable the financing will not close.

(3)Mortgage premiums or discounts are amortized as an increase or reduction to interest expense over the remaining terms of the respective mortgages.

(4)The Company assumed this fixed-rate mortgage when it acquired a property in the CIM Portfolio Acquisition during the six months ended June 30, 2022 with net discounts of $1.5 million.

As of June 30, 2022 and December 31, 2021, the Company had pledged $3.0 billion and $2.4 billion in real estate investments, respectively, at cost as collateral for its mortgage notes payable. This real estate is not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable on the properties. In addition, as of June 30, 2022, $2.0 billion in real estate investments, at cost were included in the unencumbered asset pool comprising the borrowing base under the Company’s revolving unsecured corporate credit facility (see Note 5 — Credit Facility for more details). The asset pool comprising the borrowing base under the credit facility is only available to serve as collateral or satisfy other debts and obligations if it is first removed from the borrowing base under the credit facility.

Subsequent to June 30, 2022, the Company assumed $39.0 million of fixed-rate mortgage debt to partially fund the acquisition of the final property from the CIM Portfolio Acquisition. The mortgage bears stated interest of 4.05% and matures in May 2024. See Note 16 — Subsequent Events for additional information.

In connection with refinancing certain properties, the Company may incur prepayment penalties relating to its prior debt obligations. During the three and six months ended June 30, 2022 and 2021, no such amounts were incurred. These prepayment penalties, when incurred, are included in acquisition, transaction, and other costs in the consolidated statements of operations.

The following table summarizes the scheduled aggregate principal payments on mortgage notes payable based on anticipated maturity dates for the five years subsequent to June 30, 2022 and thereafter:


	Future Principal Payments
(In thousands)	Mortgage Notes		Credit Facility (1)		Senior Notes (2)		Total
2022 (remainder)	$	3,078	$	—	$	—	$	3,078
2023	289,784		—		—		289,784
2024	26,646		—		—		26,646
2025	707,867		—		—		707,867
2026	116,929		488,000		—		604,929
2027	21,553		—		—		21,553
Thereafter	640,578		—		500,000		1,140,578
	$	1,806,435	$	488,000	$	500,000	$	2,794,435

________

(1)The Credit Facility matures on April 1, 2026, subject to the Company’s right, subject to customary conditions, to extend the maturity date by up to two additional six-month terms. See Note 5 — Credit Facility for additional information.

(2)The Senior Notes will mature on September 30, 2028. See Note 6 — Senior Notes, Net for additional information.

The Company’s mortgage notes payable agreements require compliance with certain property-level financial covenants including debt service coverage ratios. As of June 30, 2022, the Company was in compliance with all operating and financial covenants under these agreements.