Debt

A summary of the Company’s consolidated indebtedness is as follows (dollars in thousands):



	Interest Rate		Maturity Date at June 30, 2017	Carrying Value
	June 30, 2017	December 31, 2016	Maturity Date at June 30, 2017	June 30, 2017			December 31, 2016
Mortgages Payable
Core Fixed Rate	3.88%-6.0%	3.88%-6.0%	August 2017 - April 2035	$	209,098		$	234,875
Core Variable Rate - Swapped^(a)	1.71%-3.77%	1.71%-3.77%	June 2018 - June 2026	81,078			82,250
Total Core Mortgages Payable				290,176			317,125
Fund II Fixed Rate	1.00%-5.80%	1.00%-5.80%	October 2017 - May 2020	249,762			249,762
Fund II Variable Rate	LIBOR+0.79% -LIBOR+2.50%	LIBOR+0.62% -LIBOR+2.50%	August 2017 - November 2021	142,750			142,750
Fund II Variable Rate - Swapped^(a)	2.88%	2.88%	November 2021	19,672			19,779
Total Fund II Mortgages Payable				412,184			412,291
Fund III Variable Rate	Prime+0.50% -LIBOR+4.65%	Prime+0.50% -LIBOR+4.65%	August 2017 - December 2021	79,859			83,467
Fund IV Fixed Rate	3.4%-4.50%	3.4%-4.50%	October 2025-June 2026	10,503			10,503
Fund IV Variable Rate	LIBOR+1.70% -LIBOR+3.95%	LIBOR+1.70% - LIBOR+3.95%	October 2017 - April 2022	263,494			233,139
Fund IV Variable Rate - Swapped^(a)	1.78%	1.78%	April 2022	81,444			14,509
Total Fund IV Mortgages Payable				355,441			258,151
Net unamortized debt issuance costs				(16,526		)	(16,642		)
Unamortized premium				997			1,336
Total Mortgages Payable				$	1,122,131		$	1,055,728
Unsecured Notes Payable
Core Unsecured Term Loans	LIBOR+1.30% -LIBOR+1.60%	LIBOR+1.30% -LIBOR+1.60%	July 2020 - December 2022	$	51,371		$	51,194
Core Variable Rate Unsecured Term Loans - Swapped^(a)	1.24%-3.77%	1.24%-3.77%	July 2018 - March 2025	248,629			248,806
Total Core Unsecured Notes Payable				300,000			300,000
Fund IV Term Loan/Subscription Facility	LIBOR+1.65% -LIBOR+2.75%	LIBOR+1.65% -LIBOR+2.75%	August 2017- December 2017	54,920			134,636
Fund V Subscription Facility	LIBOR+1.60%	LIBOR+1.60%	May 2020	44,400			—
Net unamortized debt issuance costs				(1,698		)	(1,646		)
Total Unsecured Notes Payable				$	397,622		$	432,990
Unsecured Line of Credit
Core Unsecured Line of Credit	LIBOR+1.40%	LIBOR+1.40%	June 2020	$	24,000		$	—
Total Unsecured Line of Credit				$	24,000		$	—

Total Debt - Fixed Rate ^(b)				$	900,189		$	860,486
Total Debt - Variable Rate				660,791			645,185
Total Debt				1,560,980			1,505,671
Net unamortized debt issuance costs				(18,224		)	(18,289		)
Unamortized premium				997			1,336
Total Indebtedness				$	1,543,753		$	1,488,718

__________


(a)	At June 30, 2017, the stated rates ranged from LIBOR + 1.08% to LIBOR +1.90% for Core variable-rate debt; LIBOR + .79% to LIBOR +2.50% for Fund II variable-rate debt; PRIME + 0.50% to LIBOR +4.65% for Fund III variable-rate debt; LIBOR + 1.70% to LIBOR +3.95% for Fund IV variable-rate debt and LIBOR + 1.30% to LIBOR +1.60% for Core variable-rate unsecured notes.


(b)	Includes $430,825 and $365,343, respectively, of variable-rate debt that has been fixed with interest rate swap agreements as of the periods presented.

Mortgages Payable

During 2017, the Company obtained nine new non-recourse mortgages totaling $130.0 million with a weighted-average interest rate of 3.38% collateralized by nine properties, which mature between February 14, 2020 and April 1, 2022. The Company entered into interest rate swap contracts to effectively fix the interest rates of seven of these obligations with a notional value of $67.3 million at a weighted-average rate of 1.92%. During 2017, the Company repaid two mortgages in full, which had a total balance of $28.1 million and a weighted-average interest rate of 5.42%, and made scheduled principal payments of $1.9 million. At June 30, 2017 and December 31, 2016, the Company’s mortgages were collateralized by 47 and 39 properties, respectively, and the related tenant leases. Certain loans are cross-collateralized and contain cross-default provisions. The loan agreements contain customary representations, covenants and events of default. Certain loan agreements require the Company to comply with affirmative and negative covenants, including the maintenance of debt service coverage and leverage ratios. A portion of the Company’s variable-rate mortgage debt has been effectively fixed through certain cash flow hedge transactions (Note 8).

The mortgage loan related to Brandywine Holdings in the Company’s Core Portfolio amounted to $26.3 million and was in default at June 30, 2017 and December 31, 2016. This loan bears interest at 5.99%, excluding default interest of 5%, and is collateralized by a property, in which the Company holds a 22% controlling interest. In April 2017, the lender on this mortgage initiated a lawsuit against the Company for the full balance of the principal, accrued interest as well as penalties and fees aggregating approximately $31.0 million. The Company’s management believes that the mortgage is not recourse to the Company and that the suit is without merit.

In addition, at June 30, 2017, a mortgage loan in the amount of $14.3 million and collateralized by a Fund II property, was in default because its liquidity covenant had been breached.

Unsecured Notes Payable

The Company completed the following transactions related to its unsecured notes payable during the six months ended June 30, 2017:

•

The Company reduced its maximum commitment available on the Fund IV subscription line of credit from $100.0 million to $21.5 million. Furthermore, upon repayment of $74.1 million, net of $10.0 million in draws, the Company was in compliance with its liquidity covenant at June 30, 2017 which was not in compliance at December 31, 2016. The balance was $20.4 million at June 30, 2017 and $94.5 million at December 31, 2016. Total available credit at June 30, 2017 and December 31, 2016 was $0.0 and $55.5 million respectively on this line.


•	During the quarter, the Company obtained a new Fund V subscription line in the amount of $150.0 million. Fund V drew down $45.4 million and repaid $1.0 million. The total outstanding balance was $44.4 million as of June 30, 2017. Total available credit at June 30, 2017 was $105.6 million.

Unsecured Line of Credit

At June 30, 2017 and December 31, 2016 the Company had a total of $114.7 million and $147.5 million, respectively available under its unsecured line of credit.

The Company completed the following transaction related to its unsecured line of credit during the six months ended June 30, 2017:


•	In connection with the repayment of a secured mortgage note payable during the second quarter of 2017, the Company drew down a total of $24.0 million on the Core unsecured line of credit. The total outstanding balance was $24.0 million as of June 30, 2017.

Scheduled Debt Principal Payments

The scheduled principal repayments of the Company’s consolidated indebtedness, as of June 30, 2017 are as follows (in thousands):



Year Ending December 31,
2017 (Remainder)	$	214,660
2018	122,808
2019	211,245
2020	458,427
2021	255,058
Thereafter	298,782
	1,560,980
Unamortized fair market value of assumed debt	997
Net unamortized debt issuance costs	(18,224		)
Total indebtedness	$	1,543,753

See Note 4 for information about liabilities of the Company’s unconsolidated affiliates.