Mortgage Loans Payable And Credit Facility

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Mortgage Loans Payable And Credit Facility

Note 5. Mortgage Loans Payable and Credit Facility

Unsecured Revolving Credit Facility and Term Loans

The Company has a $310 million unsecured credit facility which consists of (1) a $260 million revolving credit facility, and (2) a $50 million term loan. Under an accordion feature, the facility can be increased to $750 million, subject to customary conditions and lending commitments. As of March 31, 2017, the Company had $151.4 million available for additional borrowings under the revolving credit facility.

The Company’s unsecured credit facility and term loans contain financial covenants including, but not limited to, maximum debt leverage, maximum secured debt, minimum fixed charge coverage, and minimum net worth. In addition, the facility contains restrictions including, but not limited to, limits on indebtedness, certain investments and distributions. Although the credit facility is unsecured, borrowing availability is based on unencumbered property adjusted net operating income, as defined in the agreements. The Company’s failure to comply with the covenants or the occurrence of an event of default under the facilities could result in the acceleration of the related debt and exercise of other lender remedies. As of March 31, 2017 the Company is in compliance with all financial covenants. Interest on borrowings under the unsecured credit facility and terms loans are based on the Company’s leverage ratio.

  Derivative Financial Instruments

At March 31, 2017, the Company had $3.7 million included in other assets and deferred charges, net, as well as $1.6 million included in accounts payable and accrued liabilities on the consolidated balance sheet relating to the fair value of the interest rate swaps applicable to the unsecured term loans discussed above. 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 Company estimates that approximately $2.1 million of accumulated other comprehensive loss will be reclassified as a charge to earnings within the next twelve months.

The following is a summary of the derivative financial instruments held by the Company at March 31, 2017 and December 31, 2016:

March 31, 2017
Designation/				Notional		Fair		Maturity	Balance sheet
Cash flow	Derivative	Count		value		value		dates	location
Qualifying	Interest rate swaps		3	$	200,000,000	$	3,668,000	2020 - 2023	Other assets and deferred charges, net
Qualifying	Interest rate swaps		2	$	150,000,000	$	1,619,000	2019 - 2021	Accounts payable and accrued liabilities
December 31, 2016
Designation/				Notional		Fair		Maturity	Balance sheet
Cash flow	Derivative	Count		value		value		dates	location
Qualifying	Interest rate swaps		3	$	200,000,000	$	3,074,000	2020 - 2023	Other assets and deferred charges, net
Qualifying	Interest rate swaps		2	$	150,000,000	$	2,321,000	2019 - 2021	Accounts payable and accrued liabilities

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 three months ended March 31, 2017 and 2016, respectively:

		Gain (loss) recognized in other
		comprehensive income
		(effective portion)
Designation/		Three months ended March 31,
Cash flow	Derivative	2017			2016
Qualifying	Interest rate swaps	$	474,000		$	(5,892,000	)
		(Loss) recognized in other
		comprehensive income
		reclassified into earnings (effective portion)
		Three months ended March 31,
	Classification	2017			2016
	Continuing Operations	$	(866,000	)	$	(922,000	)

As of March 31, 2017 the Company believes it has no significant risk associated with non-performance of the financial institutions which are the counterparties to its derivative contracts. Additionally, based on the rates in effect as of March 31, 2017, if a counterparty were to default, the Company would receive a net interest benefit.