Mortgage and Other Loans

The following table sets forth a summary of our mortgage and other loans, net of discount, at March 31, 2014 (unaudited), and at December 31, 2013 (in thousands). The interest rate of each loan is fixed unless otherwise indicated in the footnotes to the table:



	Outstanding Principal Balance, Net at
Property	March 31, 2014		December 31, 2013		Interest Rate		Maturity Date
Clifford Center⁽¹⁾	$	2,054	$	2,149	4.375	%	8/15/2014
Clifford Center Land	4,622		4,653		4.00	%	2/17/2017
Pan Am Building	59,987		59,986		6.17	%	8/11/2016
Waterfront Plaza	100,000		100,000		6.37	%	9/11/2016
Waterfront Plaza	11,000		11,000		6.37	%	9/11/2016
Davies Pacific Center	94,646		94,612		5.86	%	11/11/2016
Subtotal	272,309		272,400
Revolving line of credit⁽²⁾	25,000		25,000		1.10	%	12/31/2015
Total mortgage and other loans, net	$	297,309	$	297,400


(1)	The interest rate is a fluctuating annual rate equal to the lender’s prime rate.


(2)	The revolving line of credit matures on December 31, 2015. Amounts borrowed under the revolving line of credit bear interest at a fluctuating annual rate equal to the effective rate of interest paid by the lender on time certificates of deposit, plus 1.00%. See “Revolving Line of Credit” below.

The lenders’ collateral for notes payable, with the exception of the Clifford Center note payable, is the property and, in some instances, cash reserve accounts, ownership interests in the underlying entity owning the real property, leasehold interests in certain ground leases and rights under certain service agreements. The lenders’ collateral for the Clifford Center note payable is the leasehold property as well as guarantees from affiliates of the Company. The Operating Partnership has agreed to indemnify these affiliates (Jay H. Shidler and James C. Reynolds, who beneficially owns 12% of our Class A Common Stock) to the extent of their guaranty liability. In management’s judgment, it would be a remote possibility for us to incur any material liability under these indemnities that would have a material adverse effect on our financial condition, results of operations or cash flows.

The existing and scheduled maturities for our mortgages and other loans for the periods succeeding March 31, 2014 are as follows (in thousands and includes scheduled principal paydowns):



2014	2,147
2015	25,130
2016	266,135
2017	4,264
Total mortgage and other loans⁽¹⁾	$	297,676


(1)	This balance is the gross amount and does not include the discount of $0.4 million which is included in the outstanding balance of $297.3 million as shown in “Mortgage and other loans, net,” in the accompanying consolidated balance sheet.

Revolving Line of Credit

On September 2, 2009, we entered into a Credit Agreement (the “FHB Credit Facility”) with First Hawaiian Bank (the “Lender”). The FHB Credit Facility initially provided us with a revolving line of credit in the principal sum of $10 million. On December 31, 2009, we amended the FHB Credit Facility to increase the maximum principal amount available for borrowing under the revolving line of credit to $15 million. On May 25, 2010, we entered into an amendment with the Lender to increase the maximum principal amount available for borrowing thereunder from $15 million to $25 million and to extend the maturity date from September 2, 2011 to December 31, 2013. On December 31, 2013, we entered into an amendment with the Lender to extend the maturity date from December 31, 2013 to December 31, 2015. Amounts borrowed under the FHB Credit Facility bear interest at a fluctuating annual rate equal to the effective rate of interest paid by the lender on time certificates of deposit, plus 1.00%. We are permitted to use the proceeds of the line of credit for working capital and general corporate purposes, consistent with our real estate operations and for such other purposes as the Lender may approve. As of March 31, 2014 and December 31, 2013, we had outstanding borrowings of $25.0 million under the FHB Credit Facility. During each of the three month periods ended March 31, 2014 and 2013, we recognized $0.07 million in interest to the Lender.

As security for the FHB Credit Facility, as amended, Shidler Equities, L.P., a Hawaii limited partnership controlled by Mr. Shidler (“Shidler LP”), has pledged to the Lender a certificate of deposit in the principal amount of $25.0 million. As a condition to this pledge, the Operating Partnership and Shidler LP entered into an indemnification agreement pursuant to which the Operating Partnership agreed to indemnify Shidler LP from any losses, damages, costs and expenses incurred by Shidler LP in connection with the pledge. In addition, to the extent that all or any portion of the certificate of deposit is withdrawn by the Lender and applied to the payment of principal, interest and/or charges under the FHB Credit Facility, the Operating Partnership agreed to pay to Shidler LP interest on the withdrawn amount at a rate of 7.0% per annum from the date of the withdrawal until the date of repayment in full by the Operating Partnership to Shidler LP. Pursuant to this indemnification agreement, as amended, the Operating Partnership also agreed to pay to Shidler LP an annual fee of 2.0% of the entire $25.0 million principal amount of the certificate of deposit. During each of the three month periods ended March 31, 2014 and 2013, we recognized $0.1 million in interest to Shidler LP for the annual fee.

The FHB Credit Facility contains various customary covenants, including covenants relating to disclosure of financial and other information to the Lender, maintenance and performance of our material contracts, our maintenance of adequate insurance, payment of the Lender’s fees and expenses, and other customary terms and conditions.