MORTGAGES PAYABLE

6 Months Ended

Jun. 30, 2020

MORTGAGES PAYABLE AND UNSECURED DEBT

The following is a summary of mortgages payable as of June 30, 2020 and December 31, 2019.



		Interest Rate at	June 30,			December 31,
(Amounts in thousands)	Maturity	June 30, 2020	2020			2019
First mortgages secured by:
Variable rate
Cherry Hill (Plaza at Cherry Hill)⁽¹⁾	5/24/2022	1.77%	$	28,930		$	28,930
Westfield (One Lincoln Plaza)⁽¹⁾	5/24/2022	1.77%	4,730			4,730
Woodbridge (Plaza at Woodbridge)⁽¹⁾	5/25/2022	1.77%	55,340			55,340
Jersey City (Hudson Commons)⁽²⁾	11/15/2024	2.07%	28,816			29,000
Watchung⁽²⁾	11/15/2024	2.07%	26,828			27,000
Bronx (1750-1780 Gun Hill Road)⁽²⁾	12/1/2024	2.07%	25,377			24,500
Total variable rate debt			170,021			169,500
Fixed rate
Bergen Town Center - West, Paramus	4/8/2023	3.56%	300,000			300,000
Bronx (Shops at Bruckner)	5/1/2023	3.90%	10,668			10,978
Jersey City (Hudson Mall)⁽⁴⁾	12/1/2023	5.07%	23,264			23,625
Yonkers Gateway Center⁽⁵⁾	4/6/2024	4.16%	29,307			30,122
Las Catalinas⁽⁸⁾	8/6/2024	7.43%	128,822			129,335
Brick	12/10/2024	3.87%	50,000			50,000
North Plainfield	12/10/2025	3.99%	25,100			25,100
Middletown	12/1/2026	3.78%	31,400			31,400
Rockaway	12/1/2026	3.78%	27,800			27,800
East Hanover (200 - 240 Route 10 West)	12/10/2026	4.03%	63,000			63,000
North Bergen (Tonnelle Ave)	4/1/2027	4.18%	100,000			100,000
Manchester	6/1/2027	4.32%	12,500			12,500
Millburn	6/1/2027	3.97%	23,591			23,798
Totowa	12/1/2027	4.33%	50,800			50,800
Woodbridge (Woodbridge Commons)	12/1/2027	4.36%	22,100			22,100
East Brunswick	12/6/2027	4.38%	63,000			63,000
East Rutherford	1/6/2028	4.49%	23,000			23,000
Brooklyn (Kingswood Center)⁽⁶⁾	2/6/2028	5.07%	72,136			—
Hackensack	3/1/2028	4.36%	66,400			66,400
Marlton	12/1/2028	3.86%	37,400			37,400
East Hanover Warehouses	12/1/2028	4.09%	40,700			40,700
Union (2445 Springfield Ave)	12/10/2028	4.01%	45,600			45,600
Freeport (Freeport Commons)	12/10/2029	4.07%	43,100			43,100
Montehiedra⁽⁹⁾	6/1/2030	5.00%	82,000			83,202
Garfield	12/1/2030	4.14%	40,300			40,300
Mt Kisco⁽³⁾	11/15/2034	6.40%	13,226			13,488
Montehiedra (junior loan)⁽⁹⁾	—	—%	—			30,000
Total fixed rate debt			1,425,214			1,386,748
	Total mortgages payable		1,595,235			1,556,248
	Unamortized debt issuance costs		(10,511		)	(10,053		)
Total mortgages payable, net of unamortized debt issuance costs			1,584,724			1,546,195
Unsecured credit facilities:
Revolving credit agreement⁽⁷⁾	1/29/2024	1.22%	250,000			—
	Total unsecured credit facilities		250,000			—
Total debt outstanding			$	1,834,724		$	1,546,195


⁽¹⁾	Bears interest at one month LIBOR plus 160 bps. The mortgage loans encumbered by these properties were modified during the second quarter of 2020 to contain a payment deferral period from June 1, 2020 through August 1, 2020.


⁽²⁾	Bears interest at one month LIBOR plus 190 bps. The mortgage loans encumbered by these properties were modified during the second quarter of 2020 to contain an interest-only payment period from May 1, 2020 through July 1, 2020.


⁽³⁾	The mortgage payable balance on the loan secured by Mt Kisco includes $0.9 million of unamortized debt discount as of both June 30, 2020 and December 31, 2019. The effective interest rate including amortization of the debt discount is 7.31% as of June 30, 2020.


⁽⁴⁾	The mortgage payable balance on the loan secured by Hudson Mall includes $0.9 million and $1.0 million of unamortized debt premium as of June 30, 2020 and December 31, 2019, respectively. The effective interest rate including amortization of the debt premium is 3.85% as of June 30, 2020.


⁽⁵⁾	The mortgage payable balance on the loan secured by Yonkers Gateway Center includes $0.5 million and $0.6 million of unamortized debt premium as of June 30, 2020 and December 31, 2019, respectively. The effective interest rate including amortization of the debt premium is 3.70% as of June 30, 2020.


⁽⁶⁾	The mortgage payable balance on the loan secured by Kingswood Center includes $6.6 million of unamortized debt premium as of June 30, 2020. The effective interest rate including amortization of the debt premium is 3.43% as of June 30, 2020.


⁽⁷⁾	Bears interest at one month LIBOR plus 1.05% as of June 30, 2020.


⁽⁸⁾	In April 2020, the non-recourse mortgage loan on Las Catalinas Mall was defaulted on and became subject to incremental default interest of 3.00% while the outstanding balance remains unpaid. We currently remain in active negotiations with the special servicer and no determination has been made as to the timing or ultimate resolution of this matter.


⁽⁹⁾	On June 1, 2020, we refinanced the mortgage secured by The Outlets at Montehiedra in Puerto Rico, whereby the $30 million junior loan plus accrued interest of $5.4 million was forgiven and the senior loan was replaced by a new $82 million 10-year fixed rate mortgage, bearing interest at 5.0%.

The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately $1.3 billion as of June 30, 2020. Our mortgage loans contain covenants that limit our ability to incur additional indebtedness on these properties and in certain circumstances require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. As of June 30, 2020, we were in compliance with all debt covenants with the exception of those related to our mortgage loan on Las Catalinas Mall. The mortgage on Las Catalinas Mall has been in default since April 2020.

As of June 30, 2020, the principal repayments of the Company’s total outstanding debt for the next five years and thereafter are as follows:



(Amounts in thousands)
Year Ending December 31,
2020⁽¹⁾	$	3,960
2021	12,626
2022	101,822
2023	347,158
2024	530,208
2025	35,321
Thereafter	814,140

⁽¹⁾ Remainder of 2020.

Revolving Credit Agreement

On January 15, 2015, we entered into a $500 million Revolving Credit Agreement (the “Agreement”) with certain financial institutions. On March 7, 2017, we amended and extended the Agreement. The amendment increased the credit facility size by $100 million to $600 million and extended the maturity date to March 7, 2021 with two six-month extension options. On July 29, 2019, we entered into a second amendment to the Agreement to extend the maturity date to January 29, 2024 with two six-month extension options.

In March 2020, the Company borrowed $250 million under the Agreement. As of June 30, 2020, $350 million of credit remained available to be drawn. Financing costs associated with executing the Agreement of $3.9 million and $3.9 million as of June 30, 2020 and December 31, 2019, respectively, are included in deferred financing costs, net in the consolidated balance sheets.

On June 3, 2020, we entered into a third amendment to the Agreement. The third amendment, among other things, modifies certain definitions and the measurement period for certain financial covenants to a trailing four-quarter period instead of the most recent quarter period annualized. Company borrowings under the Agreement are subject to interest at LIBOR plus 1.05% to 1.50% and an annual facility fee of 15 to 30 basis points. Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to increase if our leverage ratio increases above predefined thresholds. The Agreement contains customary financial covenants including a maximum leverage ratio of 60% and a minimum fixed charge coverage ratio of 1.5x.

Mortgage on The Outlets at Montehiedra

During the second quarter of 2020, we completed the refinancing of our non-recourse mortgage on The Outlets at Montehiedra (“Montehiedra”) in Puerto Rico. Prior to the refinancing, the mortgage was comprised of an $83 million senior loan bearing interest at 5.33% and a $30 million junior loan bearing interest at 3.00%, plus total accrued interest of $5.7 million. Under the payoff provisions of the prior mortgage, the $30 million junior loan plus accrued interest of $5.4 million on the junior loan was forgiven and the senior loan was replaced by a new $82 million 10-year fixed rate mortgage, bearing interest at 5.00%. As a result of the transaction, we recognized a net gain on extinguishment of debt of $34.9 million during the three and six months ended June 30, 2020, comprised of the forgiven $30 million junior loan plus accrued interest of $5.4 million, offset by the write-off of $0.4 million of unamortized deferred financing fees and $0.1 million of transaction costs incurred.

The Company has provided a $12.5 million corporate guarantee if and only when Sears Holding Corporation (“Kmart”) vacates or stops paying rent. The guarantee will be released should certain financial metrics at Montehiedra be achieved even if the Kmart box remains vacant. Irrespective of whether Kmart vacates or stops paying rent, the guarantee amortizes commensurate with the loan amortization schedule and will reduce to zero in approximately six years.

Mortgage on Las Catalinas Mall

In April 2020, we notified the servicer of the $129 million non-recourse mortgage loan on Las Catalinas Mall in Puerto Rico that cash flow would be insufficient to service the debt and that we were unwilling to fund the shortfalls. Pursuant to the loan agreement, the loan is in default, is subject to incremental default interest, which increased the interest rate from 4.43% to 7.43% while the outstanding balance remains unpaid, and the lender has the ability to accelerate the full loan balance. We have accrued interest of $2.8 million related to this mortgage, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet as of June 30, 2020. We currently remain in active negotiations with the special servicer and no determination has been made as to the timing or ultimate resolution of this matter.

Mortgage on property in Montclair, NJ

On August 6, 2020, the Company obtained a 10-year non-recourse mortgage loan of $7.3 million at a rate of 3.15% on its property in Montclair, NJ.