Indebtedness

12 Months Ended

Dec. 31, 2019

The Company’s indebtedness comprised the following as of December 31, 2019 and 2018 (dollars in thousands):



	Principal Balance						Interest Rate ^(a)			Maturity Date
	December 31,						December 31,
	2019			2018			2019
Secured Debt
North Point Center Note 1 ^(b)	$	—		$	9,352		6.45	%		February 5, 2019
Lightfoot Marketplace ^(c)	—			10,500			LIBOR + 1.75%			October 12, 2023
Hoffler Place ^(d)	29,059			11,445			LIBOR + 3.24%			January 1, 2021
Summit Place ^(d)	28,824			11,057			LIBOR + 3.24%			January 1, 2021
Southgate Square	20,562			21,442			LIBOR + 1.60%			April 29, 2021
Encore Apartments ^(e)	24,842			24,966			3.25	%		September 10, 2021
4525 Main Street ^(e)	31,876			32,034			3.25	%		September 10, 2021
Red Mill West	11,296			—			4.23	%		June 1, 2022
Thames Street Wharf	70,000			—			LIBOR + 1.30%			June 26, 2022
Hanbury Village	18,515			19,019			3.78	%		August 15, 2022
Marketplace at Hilltop	10,517			—			4.42	%		October 1, 2022
1405 Point	53,000			—			LIBOR + 2.25%			January 1, 2023
Socastee Commons	4,567			4,671			4.57	%		January 6, 2023
Sandbridge Commons	8,020			8,258			LIBOR + 1.75%			January 17, 2023
Wills Wharf	29,154			—			LIBOR + 2.25%			June 26, 2023
249 Central Park Retail ^(f)	16,828			17,045			LIBOR + 1.60%		^(g)	August 10, 2023
Fountain Plaza Retail ^(f)	10,127			10,257			LIBOR + 1.60%		^(g)	August 10, 2023
South Retail ^(f)	7,388			7,483			LIBOR + 1.60%		^(g)	August 10, 2023
One City Center	25,286			—			LIBOR + 1.85%			April 1, 2024
Red Mill Central	2,538			—			4.80	%		June 17, 2024
Premier Apartments ^(h)	16,750			12,873			LIBOR + 1.55%			October 31, 2024
Premier Retail ^(h)	8,250			6,341			LIBOR + 1.55%			October 31, 2024
Red Mill South	6,137			—			3.57	%		May 1, 2025
Brooks Crossing Office	14,411			6,910			LIBOR + 1.60%			July 1, 2025
Market at Mill Creek	14,727			7,283			LIBOR + 1.55%			July 12, 2025
Johns Hopkins Village	51,800			52,708			LIBOR + 1.25%		^(g)	August 7, 2025
North Point Center Note 2	2,214			2,346			7.25	%		September 15, 2025
Lexington Square	14,696			14,940			4.50	%		September 1, 2028
Red Mill North	4,394			—			4.73	%		December 31, 2028
Greenside Apartments	34,000			25,902			3.17	%		December 15, 2029
Smith's Landing	18,174			18,985			4.05	%		June 1, 2035
Liberty Apartments	14,165			14,437			5.66	%		November 1, 2043
The Cosmopolitan	43,702			44,468			3.35	%		July 1, 2051
Total secured debt	$	645,819		$	394,722
Unsecured Debt
Senior unsecured revolving credit facility	110,000			126,000			LIBOR+1.30%-1.85%			January 24, 2024
Senior unsecured term loan	44,500			80,000			LIBOR+1.25%-1.80%			January 24, 2025
Senior unsecured term loan	160,500			100,000			LIBOR+1.25%-1.80%		^(g)	January 24, 2025
Total unsecured debt	$	315,000		$	306,000
Total principal balances	$	960,819		$	700,722
Unamortized fair value adjustments	(878		)	(1,173		)
Unamortized debt issuance costs	(9,404		)	(5,310		)
Indebtedness, net	$	950,537		$	694,239

________________________________________

(a) LIBOR rate is determined by individual lenders.

(b) On January 31, 2019, North Point Note 1 was paid off.

(d) Cross collateralized.

(e) Cross collateralized.

(f) Cross collateralized.

(g) Includes debt subject to interest rate swap agreements.

(h) Cross collateralized.

The Company’s indebtedness was comprised of the following fixed and variable-rate debt as of December 31, 2019 and 2018 (in thousands):



	December 31,
	2019		2018
Fixed-rate debt	$	488,276	$	348,426
Variable-rate debt	472,543		352,296
Total principal balance	$	960,819	$	700,722

Certain loans require the Company to comply with various financial and other covenants, including the maintenance of minimum debt coverage ratios. As of December 31, 2019, the Company was in compliance with all loan covenants.

Scheduled principal repayments and maturities during each of the next five years and thereafter are as follows (in thousands):



Year Ending December 31,	Scheduled Principal Payments		Maturities		Total Payments
2020	$	10,191	$	—	$	10,191
2021	10,914		132,124		143,038
2022	9,683		106,691		116,374
2023	7,752		124,677		132,429
2024	6,982		157,978		164,960
Thereafter	72,749		321,078		393,827
Total	$	118,271	$	842,548	$	960,819

Credit Facility

On October 3, 2019, the Operating Partnership entered into an amended and restated credit agreement (the "credit agreement"), which provides for a $355.0 million credit facility comprised of a $150.0 million senior unsecured revolving credit facility (the "revolving credit facility") and a $205.0 million senior unsecured term loan facility (the "term loan facility" and, together with the revolving credit facility, the "credit facility"), with a syndicate of banks. The amended credit facility replaces the prior $150.0 million revolving credit facility, which was scheduled to mature on October 26, 2021, and the prior $205.0 million term loan facility, which was scheduled to mature on October 26, 2022.

The credit facility includes an accordion feature that allows the total commitments to be increased to $700.0 million, subject to certain conditions, including obtaining commitments from any one or more lenders. The revolving credit facility has a scheduled maturity date of January 24, 2024, with two six-month extension options, subject to certain conditions, including payment of a 0.075% extension fee at each extension. The term loan facility has a scheduled maturity date of January 24, 2025.

The revolving credit facility bears interest at LIBOR (the London Inter-Bank Offered Rate) plus a margin ranging from 1.30% to 1.85%, and the term loan facility bears interest at LIBOR plus a margin ranging from 1.25% to 1.80%, in each case depending on the Company's total leverage. The Company is also obligated to pay an unused commitment fee of 15 or 25 basis points on the unused portions of the commitments under the revolving credit facility, depending on the amount of borrowings under the credit facility. As of December 31, 2019, the interest rates on the revolving credit facility and the term loan facility were 3.26% and 3.21%, respectively. If the Company attains investment grade credit ratings from S&P and Moody’s, the Operating Partnership may elect to have borrowings become subject to interest rates based on such credit ratings. The Company may, at any time, voluntarily prepay any loan under the credit facility in whole or in part without premium or penalty.

The Operating Partnership is the borrower under the credit facility, and its obligations under the credit facility are guaranteed by the Company and certain of its subsidiaries that are not otherwise prohibited from providing such

guaranty. The credit agreement contains customary representations and warranties and financial and other affirmative and negative covenants. The Company's ability to borrow under the credit facility is subject to ongoing compliance with a number of financial covenants, affirmative covenants, and other restrictions. The credit agreement includes customary events of default, in certain cases subject to customary cure periods. The occurrence of an event of default, if not cured within the applicable cure period, would permit the lenders to, among other things, declare the unpaid principal, accrued and unpaid interest, and all other amounts payable under the credit facility to be immediately due and payable.

The Company is currently in compliance with all covenants under the credit agreement.

Other 2019 Financing Activity

On January 31, 2019, the Company paid off North Point Center Note 1.

On March 11, 2019, the Company received $7.4 million of additional funding on the loan secured by Lightfoot Marketplace. On August 15, 2019, the Company sold the property and paid off the outstanding balance of $17.9 million. The Company retained the interest rate swap associated with the loan.

On March 14, 2019, the Company obtained a loan secured by One City Center in the amount of $25.6 million in conjunction with the acquisition of this property. This loan may be increased to $27.6 million subject to certain conditions. The loan bears interest at a rate of LIBOR plus a spread of 1.85% and will mature on April 1, 2024.

On April 24, 2019, the Company exercised its option to purchase 79% of the partnership that owns 1405 Point in exchange for extinguishing its note receivable on the project and a cash payment of $0.3 million. The project was acquired subject to a loan payable of $64.9 million, which was recorded at its fair value of $65.8 million. On December 27, 2019, the Company extended and modified the 1405 Point loan. The Company decreased the balance on the loan to $53.0 million by paying the balance of $12.3 million. The loan matures on January 1, 2023 and bears interest at a rate of LIBOR plus a spread of 2.25%; this spread will decrease to 2.00% upon achieving Debt Yield of 8.5% and further to 1.75% upon achieving Debt Yield of 9.5% (as defined in the loan agreement).

On May 23, 2019, the Company assumed notes payable in connection with the acquisition of Red Mill Commons and Marketplace at Hilltop with outstanding principal balances of $24.9 million and $10.8 million, respectively. The following table summarizes the note balance at assumption, fair value at assumption, maturity date, and interest rate for each loan ($ in thousands):



Loan name	Note balance at assumption		Fair value of loan at assumption		Loan maturity date	Loan interest rate
Red Mill North	$	4,451	$	4,520	12/31/2028	4.73	%
Red Mill South	6,310		6,090		5/1/2025	3.57	%
Red Mill Central	2,640		2,690		6/17/2024	4.80	%
Red Mill West	11,548		11,540		6/1/2022	4.23	%
Marketplace at Hilltop	10,740		10,790		10/1/2022	4.42	%
	$	35,689	$	35,630

On June 26, 2019, the Company obtained a loan secured by Thames Street Wharf in the amount of $70.0 million in conjunction with the acquisition of this property. The loan bears interest at a rate of LIBOR plus a spread of 1.30% and will mature on June 26, 2022.

On June 26, 2019, the Company entered into a $76.0 million syndicated construction loan facility for the Wills Wharf development project in Baltimore, Maryland. The facility bears interest at a rate of LIBOR plus a spread of 2.25% during construction activities and will mature on June 26, 2023.

On October 29, 2019, the Company extended and modified the Premier loan. The Company increased the balance on the loan to $25.0 million by receiving additional proceeds of $2.7 million. The loan bears interest at a rate of LIBOR plus a spread of 1.55% and will mature on October 31, 2024.

On December 12, 2019, the Company refinanced the Greenside loan. The Company increased the balance to $34.0 million by receiving additional proceeds of $5.1 million. The loan bears interest at a rate of 3.17% and will mature on December 15, 2029.

During the year ended December 31, 2019, the Company borrowed $96.3 million under its construction loans to fund development and construction.

Subsequent to December 31, 2019

Borrowings under the revolving credit facility were $130.0 million on February 20, 2020.

Other 2018 Financing Activity

On January 22, 2018, the Company extended and modified the Sandbridge Commons note. The note bears interest at a rate of LIBOR plus a spread of 1.75% and will mature on January 17, 2023.

On March 27, 2018, the Company paid off Columbus Village Note 1 and Columbus Village Note 2 in full for an aggregate amount of $8.3 million.

On May 31, 2018, the Company modified the Southgate Square note. The principal amount of the note was increased to $22.0 million, and the note now bears interest at a rate of LIBOR plus a spread of 1.60%. This note will still mature on April 29, 2021.

On June 1, 2018, the Company entered into a $16.3 million construction loan for the River City industrial facility in Chesterfield, Virginia. The loan bore interest at a rate of LIBOR plus a spread of 1.50%. On December 20, 2018, the Company sold the completed facility and paid the loan in full.

On June 14, 2018, the Company extended and modified the note secured by 249 Central Park Retail, Fountain Plaza Retail, and South Retail. The principal amount of the note was increased to $35.0 million. The note bears interest at a rate of LIBOR plus a spread of 1.60% and will mature on August 10, 2023.

On June 29, 2018, the Company entered into a $15.6 million construction loan for the Brooks Crossing Office development project. The loan bears interest at a rate of LIBOR plus a spread of 1.60% and will mature on July 1, 2025.

On July 12, 2018, the Company entered into a $16.2 million construction loan for the Market at Mill Creek development project in Mt. Pleasant, South Carolina. The loan bears interest at a rate of LIBOR plus a spread of 1.55% and will mature on July 12, 2025.

On July 27, 2018, the Company paid off the Johns Hopkins Village note and entered into a new loan. The principal amount of the new loan is $53.0 million. The loan bears interest at a rate of LIBOR plus a spread of 1.25% and will mature on August 7, 2025. The Company simultaneously entered into an interest rate swap agreement that effectively fixes the interest rate at 4.19% for the term of the loan.

On August 28, 2018, the Company entered into a $15.0 million note secured by the newly acquired Lexington Square shopping center. The note bears interest at a rate of 4.50% and will mature on September 1, 2028.

On October 12, 2018, the Company extended and modified the note secured by Lightfoot Marketplace. The Company borrowed an initial tranche of $10.5 million on this note, which bore interest at a rate of LIBOR plus a spread of 1.75%. The Company simultaneously entered into an interest rate swap agreement that effectively fixed the interest rate of the initial tranche at 4.77% per annum. On March 11, 2019, the Company received $7.4 million of additional funding under this note. On August 15, 2019, the Company paid off the $17.9 million outstanding balance of the note in conjunction with the sale of the property.

During the year ended December 31, 2018, the Company borrowed $86.9 million under its existing construction loans to fund new development and construction and repaid $10.5 million in conjunction with the sale of the River City industrial facility.

Other 2017 Financing Activity

On February 1, 2017, the Company paid off the North Point Center Note 5 in full for $0.6 million.

On February 24, 2017, the Company secured a $29.8 million construction loan for the Greenside project in Charlotte, North Carolina.

On April 7, 2017, the Company paid off the Harrisonburg Regal note in full for $3.2 million.

On April 19, 2017, the Company entered into a second amendment to the credit agreement for the Lightfoot Marketplace loan, which amended certain definitions and covenant requirements.

On June 29, 2017, the Company secured a $27.9 million construction loan for the Premier Apartments project in Virginia Beach, Virginia.

On July 13, 2017, the Company paid off the remaining balance of $4.9 million for the note secured by the Commonwealth of Virginia building in Chesapeake, Virginia in conjunction with the sale of this property.

On August 9, 2017, the Company refinanced the Hanbury Village note. The new note matures in August 2022 and has a fixed annual interest rate of 3.78%.

On August 10, 2017, the Company paid off $0.7 million of the Sandbridge Commons note in conjunction with the sale of a land outparcel at this property.

On September 1, 2017, the Company entered into a modification of The Cosmopolitan note, which reduced the interest rate from 3.75% to 3.35%.

On October 13, 2017, the Company paid down $5.0 million of the Liberty Apartments note.

On November 1, 2017, the Company extended the Lightfoot construction loan after paying the balance down to $10.5 million and paying an extension fee.

On December 28, 2017, the Company secured a $66.5 million construction loan for the 595 King Street and 530 Meeting Street development projects.

During the year ended December 31, 2017, the Company borrowed $8.9 million under its construction loans to fund new development and construction.