Mortgage Loans Payable and Unsecured Credit Facility

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Mortgage Loans Payable and Unsecured Credit Facility

Note 5. Mortgage Loans Payable and Unsecured Credit Facility

The fixed-rate mortgage and finance lease obligations were, respectively, assumed and paid off as part of the Grocery-Anchored Portfolio Sale. On August 22, 2022, the Company entered into a loan agreement with KeyBank National Association for $130 million

(the "KeyBank Credit Agreement"). Debt obligations are composed of the following at September 30, 2022 and collateralized by the 19 property portfolio:

		September 30, 2022
					Contractual
	Maturity	Balance			interest rates
Description	dates	outstanding			weighted-average
Secured credit facility:
Variable-rate:
Term loan (a)	Aug 2023	$	130,000,000		5.1%
Unamortized issuance costs			(3,404,000	)
		$	126,596,000

(a)The interest rate on this term loan consists of the term Secured Overnight Financing Rate plus 0.10% plus an applicable margin of 2.5% through February 2023, at which time increases to 4.0%.

The Company has considered its short-term (one year or less) liquidity needs and the adequacy of its estimated cash flows from operating activities and other expected financing sources to meet these needs. In particular, the Company has considered its scheduled debt maturities for the twelve months ending September 30, 2023 of $130 million. See Note 12, Subsequent Events, for a discussion of the October 28, 2022 refinancing of a portion of the 19 property portfolio.

Unsecured Revolving Credit Facility and Term Loans

On August 30, 2021, the Company amended its then-existing $300 million unsecured credit facility and $50 million term loan. After the amendment, the unsecured revolving credit facility was $185 million with an expiration in August 2024. The unsecured revolving credit facility was able to be extended, at the Company’s option for two additional one-year periods, subject to customary conditions. Interest on the borrowings under the unsecured revolving credit facility component could range from LIBOR plus 135 bps to 195 bps (150 bps at June 30, 2022, prior to its pay off, as discussed below), based on the Company’s leverage ratio. The Company extended its $50 million term loan four years with an expiration in August 2026.

Although the credit facility was unsecured, borrowing availability was based on unencumbered property adjusted net operating income for the trailing twelve months, as defined in the agreements. The unsecured revolving credit facility and term loans were paid off and terminated on July 11, 2022, in connection with the Grocery-Anchored Portfolio Sale.

Mortgage Loans Payable

On May 5, 2021, the Company closed a non-recourse mortgage for $114.0 million. The mortgage matures June 1, 2031, bears interest at a fixed-rate of 3.49% and requires payment of interest only for the first five years followed by payments of principal and interest based on thirty-year amortization for the remainder of the term. The loan is secured by five shopping centers consisting of Lawndale Plaza, The Shops at Suffolk Downs, Christina Crossing, Trexlertown Plaza, and The Point. These properties had no pre-existing debt and the proceeds from this loan were used to reduce amounts outstanding under the Company’s revolving credit facility. The mortgage loans payable were assumed by the Grocery-Anchored Purchasers, in connection with the Grocery-Anchored Portfolio Sale.

Derivative Financial Instruments

The interest rate swaps were terminated as part of the Grocery-Anchored Portfolio Sale for a $3.4 million benefit, which is included in interest income (expense) on the condensed consolidated statement of operations for the three and nine months ended September 30, 2022. The fair values of the interest rate swaps applicable to the unsecured term loans discussed above are included in accounts payable and accrued liabilities on the condensed consolidated balance sheet at December 31, 2021. Charges and/or credits relating to the changes in the fair value of the interest rate swaps are made to accumulated other comprehensive loss, limited partners’ interest, or operations (included in interest expense), as applicable. Over time, the unrealized gains and losses recorded in accumulated other comprehensive loss will be reclassified into earnings as an increase or reduction to interest expense in the same periods in which the hedged interest payments affect earnings.

The following is a summary of the derivative financial instruments held by the Company at December 31, 2021:

December 31, 2021
Designation/				Fair		Maturity	Balance sheet
Cash flow	Derivative	Count		value		dates	location
Qualifying	Interest rate swaps		5	$	8,232,000	2023-2025	Accounts payable and accrued liabilities

The notional values of the interest rate swaps held by the Company at December 31, 2021 were $300.0 million.

The following presents the effect of the Company’s derivative financial instruments on the condensed consolidated statements of operations and the condensed consolidated statements of equity for the three and nine months ended September 30, 2022 and 2021, respectively:

		(Loss) gain recognized in other
		comprehensive income (loss)
		(effective portion)
Designation/		Three months ended September 30,						Nine months ended September 30,
Cash flow	Derivative	2022			2021			2022			2021
Qualifying	Interest rate swaps	$	(3,131,000	)	$	113,000		$	6,001,000		$	1,869,000
		(Loss) recognized in other
		comprehensive income (loss)
		reclassified into earnings (effective portion)
		Three months ended September 30,						Nine months ended September 30,
	Classification	2022			2021			2022			2021
	Continuing Operations	$	—		$	(1,482,000	)	$	(2,320,000	)	$	(4,942,000	)