Mortgage Loans Payable and Credit Facilities

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Mortgage Loans Payable and Credit Facilities

Note 8. Mortgage Loans Payable and Credit Facilities

Debt and finance lease obligations are composed of the following at December 31, 2022 and 2021 and collateralized by 12 properties at December 31, 2022:

		December 31, 2022				December 31, 2021
					Contractual				Contractual
	Maturity	Balance			interest rates	Balance			interest rates
Description	dates	outstanding			weighted-average	outstanding			weighted-average
Fixed-rate mortgage
Franklin Village	Jun 2026	$	—		n/a	$	44,571,000		3.9%
Shops at Suffolk Downs (a)	Jun 2031		—		n/a		15,600,000		3.5%
Trexlertown Plaza (a)	Jun 2031		—		n/a		36,100,000		3.5%
The Point (a)	Jun 2031		—		n/a		29,700,000		3.5%
Christina Crossing (a)	Jun 2031		—		n/a		17,000,000		3.5%
Lawndale Plaza (a)	Jun 2031		—		n/a		15,600,000		3.5%
Senator Square finance lease obligation	Sep 2050		—		n/a		5,596,000		5.3%
			—		n/a		164,167,000		3.6%
Credit facilities:
Variable-rate:
Revolving credit facility (b)	Aug 2024		—		n/a		66,000,000		1.6% (b)
Fixed-rate:
Term loan (c)	Apr 2023		—		n/a		100,000,000		3.3%
Term loan (c)	Sep 2024		—		n/a		75,000,000		3.8%
Term loan (c)	Jul 2025		—		n/a		75,000,000		4.7%
Term loan (c)	Aug 2026		—		n/a		50,000,000		3.3%
Term loan	Nov 2032		110,000,000		5.3%		—		n/a
Term loan	Jan 2033		25,000,000		6.4%		—		n/a
			135,000,000		5.5%		530,167,000		3.5%
Unamortized issuance costs			(3,538,000	)			(3,129,000	)
		$	131,462,000			$	527,038,000

(a)The mortgages for these properties were cross-collateralized.

(b)The revolving credit facility was subject to two one-year extensions at the Company’s option.

(c)The interest rates on these term loans consisted of LIBOR plus a credit spread based on the Company’s leverage ratio, for which the Company had interest rate swap agreements which converted the LIBOR rates to fixed rates. Accordingly, these term loans are presented as fixed-rate debt.

The finance lease obligation was part of the Grocery-Anchored Portfolio Sale and had a zero balance at December 31, 2022.

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 new 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.

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 new 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 new 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.

KeyBank Credit Agreement

On August 22, 2022, the Company entered into a loan agreement with KeyBank National Association for $130.0 million (the “KeyBank Credit Agreement”). The interest rate on this term loan consisted 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% and was collateralized by all of the Company's remaining 19 properties following the Transactions. As of December 31, 2022, the KeyBank Credit Agreement was repaid with the proceeds from the Guggenheim Loan Agreement and Citi Loan Agreement.

Secured Term Loans

On October 28, 2022, the Company entered into a term loan agreement with Guggenheim Real Estate, LLC for $110.0 million at a fixed rate of 5.25% with interest-only payments due monthly (“Guggenheim Loan Agreement”). Commencing on December 10, 2027, until the maturity date of November 10, 2032, monthly principal and interest payments will be made based on a 30-year amortization schedule calculated based on the principal amount as of that time. The Guggenheim Loan Agreement includes certain financial covenants. The Guggenheim Loan Agreement is collateralized by 10 properties, consisting of Brickyard Plaza, Fairview Commons, Gold Star Plaza, Golden Triangle, Hamburg Square, Pine Grove Plaza, Southington Center, Trexler Mall, Washington Center and Webster Commons, and proceeds were used to paydown the Company’s KeyBank Credit Agreement.

On December 21, 2022, the Company entered into a term loan agreement with Citi Real Estate Funding Inc. (“Citi Loan Agreement”) for $25.0 million at a fixed rate of 6.35% with interest-only payments due monthly through maturity on January 6, 2033. The Citi Loan Agreement is collateralized by 2 properties, consisting of Patuxent Crossing and Coliseum Marketplace, and proceeds were used to satisfy the remaining obligation of the KeyBank Credit Agreement and released the remaining collateral under that agreement.

Scheduled Principal Payments

Scheduled principal payments on secured term loans at December 31, 2022, due on various dates from 2032 to 2033, are as follows:

2023	$	—
2024		—
2025		—
2026		—
2027		126,000
Thereafter		134,874,000
	$	135,000,000

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 expense, net on the consolidated statement of operations for the year ended December 31, 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 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 income (loss), noncontrolling interests (minority interests in consolidated joint ventures and 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 consolidated statements of operations and the consolidated statements of equity for the years ended 2022, 2021 and 2020, respectively:

		(Loss) gain recognized in other
		comprehensive income (loss)
		(effective portion)
Designation/		Years ended December 31,
Cash flow	Derivative	2022			2021			2020
Qualifying	Interest rate swaps	$	6,001,000		$	4,148,000		$	(17,940,000	)
		(Loss) recognized in other
		comprehensive income (loss)
		reclassified into earnings (effective portion)
		Years ended December 31,
	Classification	2022			2021			2020
	Continuing Operations	$	(2,320,000	)	$	(6,476,000	)	$	(6,062,000	)