Debt

9 Months Ended

Sep. 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	Maximum Facility Size		September 30, 2023		December 31, 2022
Mortgage notes & credit facilities:
Unsecured term loan credit facility(2)	S + 1.65%	8/11/2027	$	1,095,500	$	1,095,500	$	953,000
Unsecured revolving credit facility(3)	S + 1.68%	10/25/2026	$	469,500	280,750		316,000
Mortgages(4)	S + 2.59%	10/21/2024	N/A		538,955		519,522
Discount on assumed debt					(22)		(407)
Deferred financing costs, net					(14,412)		(11,178)
Total Mortgage notes & credit facility, net:					$	1,900,771	$	1,776,937
Affiliate line of credit
Affiliate line of credit(5)	S + 1.70%		$	250,000	225,000		250,000
Affiliate line of credit, net:					$	225,000	$	250,000

__________________

(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 September 30, 2023, we have outstanding interest rate swaps with an aggregate notional balance of $995,085 and outstanding interest rate caps with an aggregate notional balance of $519,001 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 nine months ended September 30, 2023 was 6.82%. As of September 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 nine months ended September 30, 2023 was 6.81%.

(4)In March 2023, certain of our mortgages were amended to transition certain LIBOR-based rates to certain replacement reference rates. As of September 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 $45,085 and $519,001 respectively as of September 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 nine months ended September 30, 2023 was 6.91%.

(6)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 September 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 September 30, 2023:

Year	Amount
2023 (remaining)	$	—
2024	493,870
2025	—
2026	267,566
2027	1,153,769
2028	—
Thereafter	—
Total	$	1,915,205

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 in (i) cash, (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 September 30, 2023, $225,000 was outstanding under the affiliate line of credit and had accrued interest expense in the amount of $2,878. Any unpaid principal balance and unpaid accrued interest is payable on demand upon 120 days written notice by the BO Lender.