Debt

Mortgages Payable

The following is a summary of mortgages payable as of December 31, 2017 and 2016:



	Weighted Average Effective Interest Rate at	December 31,
	December 31, 2017	2017 ⁽¹⁾			2016
		(In thousands)
Variable rate ⁽²⁾	3.62%	$	498,253		$	547,291
Fixed rate ⁽³⁾	4.25%	1,537,706			620,327
Mortgages payable		2,035,959			1,167,618
Unamortized deferred financing costs and premium/discount, net		(10,267		)	(2,604		)
Mortgages payable, net		$	2,025,692		$	1,165,014
Payable to former parent ⁽⁴⁾	—	$	—		$	283,232

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⁽¹⁾	Includes mortgages payable assumed in the Combination. See Note 3 for additional information.


⁽²⁾	Includes variable rate mortgages payable with interest rate cap agreements.


⁽³⁾	Includes variable rate mortgages payable with interest rates fixed by interest rate swap agreements.


⁽⁴⁾	Includes amounts payable to former parent as of December 31, 2016 in connection with the Bowen Building and The Bartlett. See Note 18 for additional information.

As of December 31, 2017, the net carrying value of real estate collateralizing our mortgages payable totaled $2.9 billion. 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. Certain of our mortgage loans are recourse to us. As of December 31, 2017, we were not in default under any mortgage loan.

In the Combination, we assumed mortgages payable with an aggregate principal balance of $768.5 million. In addition, we entered into mortgages payable with an aggregate principal balance of $79.3 million during the year ended December 31, 2017 with an ability to draw an additional $143.7 million for construction. During the year ended December 31, 2017, we repaid mortgages payable with an aggregate principal balance of $250.0 million, which includes mortgages payable totaling $64.8 million assumed in the Combination. We recognized losses on the extinguishment of debt in conjunction with these repayments of $701,000 for the year ended December 31, 2017.

As of December 31, 2017, we had various interest rate swap and cap agreements with an aggregate notional value of $1.4 billion to swap variable interest rates to fixed rates on certain of our mortgages payable. See Note 15 for additional information.

Credit Facility

On July 18, 2017, we entered into a $1.4 billion credit facility, consisting of a $1.0 billion revolving credit facility maturing in July 2021, with two six-month extension options, a delayed draw $200.0 million unsecured term loan ("Tranche A-1 Term Loan") maturing in January 2023 and a delayed draw $200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in July 2024. The interest rate for the credit facility varies based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets and ranges (a) in the case of the revolving credit facility, from LIBOR plus 1.10% to LIBOR plus 1.50%, (b) in the case of the Tranche A-1 Term Loan, from LIBOR plus 1.20% to LIBOR plus 1.70% and (c) in the case of the Tranche A-2 Term Loan, from LIBOR plus 1.55% to LIBOR plus 2.35%. There are various LIBOR options in the credit facility, and we elected the one-month LIBOR option as of December 31, 2017. In October 2017, we entered into an interest rate swap with a notional value of $50.0 million to convert the variable interest rate applicable to our Tranche A-1 Term Loan to a fixed interest rate, providing a base interest rate under the facility agreement of 1.97% per annum. The interest rate swap matures in January 2023, concurrent with the maturity of our Tranche A-1 Term Loan. As of December 31, 2017, we were not in default under our credit facility.

On July 18, 2017, in connection with the Combination, we drew $115.8 million on the revolving credit facility and $50.0 million under the Tranche A-1 Term Loan. In connection with the execution of the credit facility, we incurred $11.2 million in debt issuance costs.

The following is a summary of amounts outstanding under the credit facility as of December 31, 2017:



	December 31, 2017
	Interest Rate	Balance
		(In thousands)
Revolving credit facility ⁽¹⁾	2.66%	$	115,751

Tranche A-1 Term Loan	3.17%	$	50,000
Unamortized deferred financing costs, net		(3,463		)
Unsecured term loan, net		$	46,537

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⁽¹⁾	As of December 31, 2017, letters of credit with an aggregate face amount of $5.7 million were provided under our revolving credit facility.

Principal Maturities

Principal maturities of debt outstanding as of December 31, 2017, including mortgages payable, the Tranche A-1 Term Loan and borrowings on the revolving credit facility, are as follows:



Year ending December 31,	Amount
	(In thousands)
2018	$	337,513
2019	227,041
2020	225,914
2021	216,545
2022	327,500
Thereafter	867,197
Total	$	2,201,710

Interest costs incurred, excluding amortization and accretion of discounts and premiums and deferred financing costs, were $65.4 million, $54.3 million and $55.5 million for each of the three years in the period ended December 31, 2017, of which $12.7 million, $4.1 million and $6.4 million were capitalized.