Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt

Debt

The following table details the mortgage notes, credit facilities and related party note payable of the Company:

					Principal Balance Outstanding
Indebtedness	Weighted Average Interest Rate(1)(7)	Weighted Average Maturity Date(6)	Maximum Facility Size		June 30, 2023		December 31, 2022
Mortgage notes & credit facilities:
Unsecured term loan credit facility(2)	S + 1.80%	8/11/2027	$	1,095,500	$	1,095,500	$	953,000
Unsecured revolving credit facility(3)	S + 1.85%	8/11/2026	469,500		213,571		316,000
Mortgages(4)	S + 2.59%	4/9/2024	N/A		573,324		519,522
Discount on assumed debt					(162)		(407)
Deferred financing costs, net					(13,982)		(11,178)
Total Mortgage notes & credit facility, net:					$	1,868,251	$	1,776,937
Affiliate line of credit
Affiliate line of credit(5)	S + 1.85%		$	250,000	250,000		250,000
Affiliate line of credit, net:					$	250,000	$	250,000

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(1)The term “S” refers to the relevant floating benchmark rates, which include 30-day SOFR, three-month SOFR, one-month EURIBOR, and one-month SONIA as applicable to each loan. As of June 30, 2023, we have outstanding interest rate swaps with an aggregate notional balance of $996,779 and outstanding interest rate caps with an aggregate notional balance of $526,546 that mitigate our exposure to potential future interest rate increases under our floating-rate debt.

(2)The unsecured term loan credit facility bears interest at a base rate plus a margin ranging from 0.25% to 1.85%. The base rate is the greater of (a) Keybank N.A.’s announced prime rate, (b) 0.5% above the federal funds effective rate, (c) SOFR plus 0.10%, and (d) 1.0%. The weighted average interest rate for the unsecured term loan credit facility for the six months ended June 30, 2023 was 6.70%. As of June 30, 2023, we have outstanding interest rate swaps with aggregate notional values of $700,000 and $250,000 that are structured such that the SOFR rates result in fixed rates of 3.65% and 3.42%, respectively.

(3)The unsecured revolving credit facility bears interest at a base rate plus a margin ranging from 0.30% to 1.90%. The base rate is the greater of (a) Keybank N.A.’s announced prime rate, (b) 0.5% above the federal funds effective rate, (c) SOFR plus 0.10%, and (d) 1.0%. The weighted average interest rate for the unsecured revolving credit facility for the six months ended June 30, 2023 was 6.68%.

(4)Certain of the mortgage loans include one-year extension options subject to the satisfaction of certain conditions. To the extent the Company believes conditions will be met to exercise the extension options, the maximum maturity date has been assumed. In March 2023, certain of our mortgages were amended to transition certain LIBOR-based rates to certain replacement reference rates. As of June 30, 2023, this reference rate transition has impacted only certain of our mortgages. We have interest rate swaps and caps with an aggregate notional value of $46,779 and $526,546 respectively as of June 30, 2023, that are structured such that the variable rates result in a fixed rate of 3.74% and a capped rate of 3.00% respectively.

(5)The affiliate note payable bears interest at a base rate plus a margin ranging from 0.30% to 1.90%. The base rate is the greater of (a) Keybank N.A.’s announced prime rate, (b) 0.5% above the federal funds effective rate, (c) SOFR plus 0.10%, and (d) 1.0%. The weighted average interest rate for the affiliate note payable for the six months ended June 30, 2023 was 6.79%.

(6)For loans where the Company, at its sole discretion, has extension options, the maximum maturity date has been assumed.

(7)The Company’s mortgage and notes payable contain yield or spread maintenance provisions.

The Company is subject to various financial and operational covenants under certain of its mortgage notes, term loans credit facilities, and revolving credit facility agreements. These covenants require the Company to maintain certain financial ratios, which include leverage, debt service coverage, and tangible net worth thresholds, among others. As of June 30, 2023, the Company believes it was in compliance with all of its loan covenants that could result in a default under such agreements.

The following table details the future principal payments due under the Company’s outstanding third-party borrowings as of June 30, 2023:

Year	Amount
2023 (remaining)	$	305,141
2024	221,405
2025	—
2026	260,349
2027	1,095,500
2028	—
Thereafter	—
Total	$	1,882,395

Affiliate Line of Credit

On August 8, 2022, the NLT OP entered into an interest-bearing revolving promissory note with an affiliate, Blue Owl Capital Holdings LP (the “BO Lender”) in the principal amount of up to $250,000. The interest is payable monthly in arrears at the Lender’s election either (i) cash or (ii) Class I units of the NLT OP (using the most recently available net asset value per unit) or (iii) Class I shares of ORENT (using the most recently available net asset value per share).

As of June 30, 2023, $250,000 was outstanding under the affiliate line of credit and had accrued interest expense in the amount of $2,995. Any unpaid principal balance and unpaid accrued interest is payable on demand upon 120 days written notice by the BO Lender.