Indebtedness

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Indebtedness

Indebtedness

The Company’s indebtedness comprised the following as of December 31, 2022 and 2021 (dollars in thousands):  

	Principal Balance					Interest Rate (a)				Maturity Date
	December 31,					December 31,
	2022		2021			2022
Secured Debt
Delray Beach Plaza(b)	$	—	$	14,039			N/A			N/A
Red Mill West(c)	—		10,386				N/A			N/A
Hoffler Place(d)(e)	—		18,400				N/A			N/A
Summit Place(d)(e)	—		23,100				N/A			N/A
North Pointe Center Note 2(f)	—		1,942				N/A			N/A
The Residences at Annapolis Junction(g)	—		84,375				N/A			N/A
Marketplace at Hilltop(h)	—		9,706				N/A			N/A
1405 Point(i)	—		52,286				N/A			N/A
Brooks Crossing Office(i)	—		14,882				N/A			N/A
One City Center(i)	—		24,084				N/A			N/A
Wills Wharf(j)	—		64,288				N/A			N/A
249 Central Park Retail(j)(k)	—		16,352				N/A			N/A
Fountain Plaza Retail(j)(k)	—		9,841				N/A			N/A
South Retail(j)(k)	—		7,179				N/A			N/A
Chronicle Mill	27,630		—				LIBOR+	3.00%		May 5, 2024
Red Mill Central	2,013		2,188					4.80%		June 17, 2024
Premier Apartments(l)	16,269		16,508				LIBOR+	1.55%		October 31, 2024
Premier Retail(l)	8,013		8,131				LIBOR+	1.55%		October 31, 2024
Red Mill South	5,191		5,518					3.57%		May 1, 2025
Market at Mill Creek	12,494		13,142				LIBOR+	1.55%		July 12, 2025
Gainesville Apartments	30,000		18,114				SOFR+	1.50%		December 20, 2025
Encore Apartments(m)	23,980		24,523					2.93%		February 10, 2026
4525 Main Street(m)	30,785		31,476					2.93%		February 10, 2026
Southern Post(n)	—		—				SOFR+	2.25%		August 25, 2026
Thames Street Wharf	69,327		70,761				BSBY+	1.30%	(o)	September 30, 2026
Constellation Energy Building	175,000		—				BSBY+	1.50%		November 1, 2026
Southgate Square	26,195		27,060				LIBOR+	1.90%		December 21, 2026
Nexton Square	22,195		20,107				SOFR+	1.95%		June 30, 2027
Liberty Apartments	20,926		13,572				SOFR+	1.50%		September 27, 2027
Greenbrier Square	19,940		20,000					3.74%		October 10, 2027
Lexington Square	13,892		14,172					4.50%		September 1, 2028
Red Mill North	4,079		4,189					4.73%		December 31, 2028
Greenside Apartments	31,862		32,598					3.17%		December 15, 2029
Smith's Landing	15,535		16,452					4.05%		June 1, 2035
Edison Apartments	15,563		15,926					5.30%		December 1, 2044
The Cosmopolitan	41,243		42,090					3.35%		July 1, 2051
Total secured debt	$	612,132	$	747,387
Unsecured Debt
Senior unsecured revolving credit facility	$	61,000	$	5,000		SOFR+	1.30%-1.85%			January 22, 2027
M&T unsecured term loan	100,000		—			SOFR+	1.25%-1.80%		(o)	March 8, 2027
Senior unsecured term loan	31,658		19,500			SOFR+	1.25%-1.80%			January 21, 2028
Senior unsecured term loan	268,342		185,500			SOFR+	1.25%-1.80%		(o)	January 21, 2028
Total unsecured debt	461,000		210,000
Total principal balances	1,073,132		957,387
Other note payable(p)	6,131		10,144		(q)
Unamortized GAAP adjustments	(11,002)		(8,621)
Loans reclassified to liabilities related to assets held for sale, net	—		(41,354)
Indebtedness, net	$	1,068,261	$	917,556

________________________________________

(a) London Inter-Bank Offered Rate ("LIBOR"), SOFR, and BSBY rates are determined by individual lenders.

(b) On January 19, 2022 the Delray Beach Plaza note was paid off.

(c) On March 3, 2022 the Red Mill West note was paid off.

(d) Cross collateralized.

(e) The loans secured by Hoffler Place and Summit Place were paid off on April 1, 2022 and April 25, 2022, respectively, in conjunction with the sales of the properties. Both properties were held for sale as of December 31, 2021.

(f) On June 29, 2022 the note associated with North Pointe Phase II was paid off in conjunction with the sale of the property.

(g) On July 22, 2022 the note associated with The Residences at Annapolis Junction was paid off in conjunction with the sale of the property.

(h) On August 15, 2022 the Marketplace at Hilltop note was paid off.

(i) On August 25, 2022 the notes secured by the 1405 Point, Brooks Crossing Office, and One City Center properties were paid off.

(j) On December 6, 2022 these notes were paid off with the proceeds of the M&T unsecured term loan.

(k) Cross collateralized.

(l) Cross collateralized.

(m) Cross collateralized.

(n) No funding on the construction loan as of December 31, 2022.

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

(p) Represents the fair value of additional ground lease payments at 1405 Point over the approximately 40-year remaining lease term.

(q) Includes an earn-out liability for the Gainesville Apartments development project as of December 31, 2021, which was paid in October 2022.

The Company’s indebtedness was comprised of the following fixed and variable-rate debt as of December 31, 2022 and 2021 (in thousands):

	December 31,
	2022		2021
Fixed-rate debt	$	641,752	$	534,371
Variable-rate debt	431,380		423,016
Total principal balance	$	1,073,132	$	957,387

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, 2022, 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 (1)	Scheduled Principal Payments		Maturities		Total Payments
2023	$	9,770	$	—	$	9,770
2024	10,376		53,022		63,398
2025	10,736		45,259		55,995
2026	8,150		309,376		317,526
2027	4,796		217,779		222,575
Thereafter	61,763		342,105		403,868
Total (1)	$	105,591	$	967,541	$	1,073,132

________________________________________

(1)Debt principal payments and maturities exclude increased ground lease payments at 1405 Point which are classified as a note payable in the Company's consolidated balance sheets.

Amended Credit Facility

On August 23, 2022, the Company, as parent guarantor, and the Operating Partnership, as borrower, entered into an amended and restated credit agreement (the "Credit Agreement"), which provides for a $550.0 million credit facility comprised of a $250.0 million senior unsecured revolving credit facility (the "revolving credit facility") and a $300.0 million senior unsecured term loan facility (the "term loan facility" and, together with the revolving credit facility, the "amended 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 January 24, 2024, and the prior $205.0 million term loan facility, which was scheduled to mature on January 24, 2025.

The amended credit facility includes an accordion feature that allows the total commitments to be increased to $1.0 billion, subject to certain conditions, including obtaining commitments from any one or more lenders. The revolving credit facility has a scheduled maturity date of January 22, 2027, with two six-month extension options,

subject to the Company's satisfaction of certain conditions, including payment of a 0.075% extension fee at each extension. The term loan facility has a scheduled maturity date of January 21, 2028.

The revolving credit facility bears interest at SOFR plus a margin ranging from 1.30% to 1.85%, and the term loan facility bears interest at SOFR 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 revolving credit facility. If the Company or the Operating Partnership attains investment grade credit ratings from both S&P Global Ratings and Moody’s Investors Service, Inc., 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 amended credit facility in whole or in part without premium or penalty.

The Operating Partnership is the borrower under the amended credit facility, and its obligations under the amended 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 amended 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 amended credit facility to be immediately due and payable.

On January 7, 2021, the Operating Partnership entered into a $15.0 million standby letter of credit using the available capacity under the prior credit facility to guarantee the funding of its investment in the Harbor Point Parcel 3 joint venture, which is the developer of T. Rowe Price's new global headquarters. This letter of credit was available for draw down on the prior revolving credit facility in the event the Company did not meet its equity requirement. The letter of credit expired on January 4, 2022 and was not required to be renewed.

The Company is currently in compliance with all covenants under the Credit Agreement.

M&T Term Loan Facility

On December 6, 2022, the Company, as parent guarantor, and the Operating Partnership, as borrower, entered into a term loan agreement (the "M&T term loan agreement") with Manufacturers and Traders Trust Company, as lender and administrative agent, which provides a $100.0 million senior unsecured term loan facility (the "M&T term loan facility"), with the option to increase the total capacity to $200.0 million, subject to the Company's satisfaction of certain conditions. The proceeds from the M&T term loan facility were used to repay the loans secured by the Wills Wharf, 249 Central Park Retail, Fountain Plaza Retail, and South Retail properties. The M&T term loan facility has a scheduled maturity date of March 8, 2027, with a one-year extension option, subject to the Company's satisfaction of certain conditions, including payment of a 0.075% extension fee.

The M&T term loan facility bears interest at a rate elected by the Operating Partnership based on term SOFR, Daily Simple SOFR, or the Base Rate (as defined below), and in each case plus a margin. The margin under each interest rate election depends on the Company's total leverage. The "Base Rate" is equal to the highest of: (a) the rate of interest in effect for such day as publicly announced from time to time by M&T Bank as its “prime rate” for such day, (b) the Federal Funds Rate for such day, plus 0.50%, (c) one month term SOFR for such day plus 100 basis points and (d) 1.00%. For the year ended December 31, 2022, the Operating Partnership has elected for the loan to bear interest at term SOFR plus margin. If the Company or the Operating Partnership attains investment grade credit ratings from both S&P Global Ratings and Moody's Investor Service, Inc., 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 the M&T term loan facility in whole or in part without premium or penalty, provided certain conditions are met.

The Operating Partnership is the borrower under the M&T term loan facility, and its obligations under the M&T term loan facility are guaranteed by the Company and certain of its subsidiaries that are not otherwise prohibited from providing such guaranty. The M&T term loan agreement contains customary representations and warranties and financial and other affirmative and negative covenants. The Company's ability to borrow under the M&T term loan facility is subject to ongoing compliance with a number of financial covenants, affirmative covenants, and other restrictions. The term loan 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 M&T term loan facility to be immediately due and payable.

The Company is currently in compliance with all covenants under the M&T term loan agreement.

Other 2022 Financing Activity

On January 5, 2022, the Company contributed $2.6 million to the Harbor Point Parcel 3 joint venture in order to meet the lender's equity funding requirement since the $15.0 million standby letter of credit discussed above expired on January 4, 2022.

On January 14, 2022, the Company acquired a 79% membership interest and an additional 11% economic interest in the partnership that owns the mixed-use property known as the Constellation Energy Building. The property was subject to a $156.1 million loan, which the Company immediately refinanced following the acquisition with a new $175.0 million loan. The new loan bears interest at a rate of BSBY plus a spread of 1.50% and will mature on November 1, 2026.

On January 19, 2022, the Company paid off the $14.1 million balance of the loan secured by the Delray Beach Plaza shopping center.

On March 3, 2022, the Company paid off the $10.3 million balance of the loan secured by the Red Mill West Commons shopping center.

On April 25, 2022, Harbor Point Parcel 3, a joint venture to which the Company is party, entered into a construction loan agreement for $161.5 million.

On April 1, 2022, the Company paid off the $18.4 million loan secured by Hoffler Place in conjunction with the sale of the property.

On April 25, 2022, the Company paid off the $23.1 million loan secured by Summit Place in conjunction with the sale of the property.

On April 25, 2022, Harbor Point Parcel 4, a real estate venture to which the Company is party, entered into a construction loan agreement for $109.7 million.

On June 29, 2022, the Company paid off the $1.9 million loan balance associated with North Pointe Phase II in conjunction with the sale of the property leased and occupied by Costco.

On June 30, 2022, the Company refinanced the $20.1 million loan secured by Nexton Square. The new $22.5 million loan bears interest at a rate of SOFR plus a spread of 1.95% (SOFR has a 0.30% floor) and will mature on June 30, 2027.

On July 22, 2022, the Company paid off the $84.4 million loan secured by The Residences at Annapolis Junction in conjunction with the sale of the property.

On August 15, 2022, the Company paid off the $9.4 million balance of the loan secured by the Marketplace at Hilltop shopping center.

On August 25, 2022, the Company paid off the $51.8 million, $14.6 million, and $23.6 million balances of the loans secured by the 1405 Point, Brooks Crossing Office, and One City Center properties, respectively.

On August 25, 2022, the Company entered into a $73.6 million construction loan agreement for the Southern Post development project. The loan bears interest at a rate of SOFR plus a spread of 2.25%. The loan matures on August 25, 2026 and has two 12-month extension options. There was no balance outstanding on the loan as of December 31, 2022.

On September 27, 2022, the Company refinanced the $13.4 million loan secured by Liberty Apartments. The new $21.0 million loan bears interest at a rate of SOFR plus a spread of 1.50% and will mature on September 27, 2027.

On December 6, 2022, the Company paid off the $64.3 million, $16.1 million, $9.7 million, and $7.1 million balances of the loans secured by the Wills Wharf, 249 Central Park Retail, Fountain Plaza Retail, and South Retail properties, respectively.

On December 20, 2022, the Company refinanced the $29.6 million loan secured by Gainesville Apartments. The new $30.0 million loan bears interest at a rate of SOFR plus a spread of 1.50%. The loan matures on December 20, 2025 and has two 12-month extension options, subject to certain conditions.

During the year ended December 31, 2022, the Company borrowed $39.8 million under its existing construction loans to fund new development and construction.

2021 Financing Activity

On January 15, 2021, the Company refinanced the loan secured by 4525 Main Street and Encore Apartments. The Company increased the balance by $1.5 million, bringing the total balance of the loan to $57.0 million. The new loan bears interest at a rate of 2.93% and will mature on February 10, 2026.

On January 28, 2021, the Company refinanced the Nexton Square loan and paid the balance down by $2.0 million, bringing the balance to $20.1 million. The loan bore interest at a rate of LIBOR plus a spread of 2.25% (LIBOR has a 0.25% floor) and was scheduled to mature on February 1, 2023. This loan was subsequently refinanced prior to its original maturity date. See “Other 2022 Financing Activity” above.

On March 8, 2021, the Company obtained a loan secured by Delray Beach Plaza in the amount of $14.5 million. The loan bore interest at a rate of LIBOR plus a spread of 3.00% and was scheduled to mature on March 8, 2026. This loan was subsequently paid off prior to its original maturity date. See “Other 2022 Financing Activity” above.

On May 5, 2021, the Company entered into a $35.1 million construction loan agreement for the Chronicle Mill development project. The loan bears interest at a rate of LIBOR plus a spread of 3.00% (LIBOR has a 0.25% floor). The loan matures on May 5, 2024 and has two 12-month extension options.

On August 24, 2021, as a part of the Greenbrier Square acquisition, the Company assumed a note payable of $20.0 million. The loan bears interest at a fixed rate of 3.74% and will mature on October 10, 2027.

On September 30, 2021, the Company refinanced the loan secured by Thames Street Wharf. The new $71.0 million loan bears interest at a rate of BSBY plus a spread of 1.30% and will mature on September 30, 2026. The Company simultaneously entered into an interest rate swap agreement that effectively fixes the interest rate at 2.35% for the term of the loan.

On April 15, 2021, the Company refinanced the $19.5 million Southgate Square loan. On December 21, 2021, the Company refinanced the loan with a new $27.1 million loan. The new loan bears interest at a rate of LIBOR plus a spread of 1.90% (LIBOR has a 0.20% floor) and will mature on December 21, 2026.

During the year ended December 31, 2021, the Company borrowed $23.4 million under its existing construction loans to fund new development and construction.