INDEBTEDNESS

Overview

Indebtedness consists of mortgage loans, unsecured notes, and borrowings under a credit facility. The weighted average interest rates for the years ended December 31, 2012, 2011 and 2010 were 5.3%, 5.8% and 6.2%, respectively. Interest costs during the years ended December 31, 2012, 2011 and 2010 in the amount of $9.9 million, $3.0 million and $929,000, respectively, were capitalized. Cash paid for interest for the years ended December 31, 2012, 2011 and 2010 was $132.2 million, $134.3 million and $145.8 million, respectively.

The Company is subject to financial covenants contained in some of its debt agreements, the most restrictive of which are detailed below under the heading "Credit Facility." As of December 31, 2012, the Company was in compliance with all financial covenants.

The scheduled principal amortization and maturities of the Company's mortgage loans, unsecured notes outstanding and the Credit Facility (as defined below) and the related weighted average interest rates at December 31, 2012 are as follows (in thousands, except percentages):



											Weighted
	Mortgages										Average
	Principal		Principal		Unsecured		Credit				Interest
	Amortization		Maturities		Notes		Facility		Total		Rate

2013	$	5,438	$	4,506	$	—	$	—	$	9,944	5.59	%
2014	6,492		2,696		200,000		—		209,188		5.66	%
2015	6,107		44,469		316,000		92,000		458,576		4.35	%
2016	4,964		182,318		300,000		—		487,282		6.10	%
2017	3,832		2,349		296,543		—		302,724		6.60	%
2018	1,821		—		100,000		—		101,821		7.45	%
2019	1,811		3,121		—		—		4,932		3.55	%
2020	1,749		2,995		350,000		—		354,744		4.74	%
2021	1,654		—		—		—		1,654		4.76	%
2022 and thereafter	24,586		1,947		700,000		—		726,533		3.84	%
	$	58,454	$	244,401	$	2,262,543	$	92,000	$	2,657,398	5.06	%

Mortgage Loans, Unsecured Notes

Mortgage loans with maturities ranging from 2013 to 2033 are collateralized by and in some instances cross-collateralized by properties with a net book value of $517.9 million as of December 31, 2012.

The interest rates on $2,549.4 million of mortgage loans and unsecured notes are fixed and range from 3.0% to 7.5%. The weighted average remaining term for the mortgage loans and unsecured notes is 6.0 years.

Credit Facility

The Company has maintained an unsecured credit facility throughout 2010, 2011 and 2012. During that period the Company has replaced, restated and amended its credit facility. This activity has resulted in changes to due dates, borrowing costs and covenant calculations. As replaced, restated and amended these credit facilities are referred to below as the "Credit Facility." The interest rate on borrowings under the Credit Facility fluctuates based upon ratings from Moody’s Investors Service, Inc., Standard and Poor’s Ratings Group and Fitch, Inc. Based on the Company's present ratings, borrowings under the Credit Facility are priced at LIBOR plus 107.5 basis points. The Credit Facility expires in November 2015 and has a one-year extension option at the Company's option, subject to the payment of a stated fee. The Credit Facility contains a competitive bid option, whereby participating lenders bid on the interest rate to be charged. This feature is available for up to 50% of the amount of the facility. The interest rate on the $92.0 million of borrowings outstanding as of December 31, 2012 was 1.11%. There is also a 20 basis point annual facility fee on the current borrowing capacity. The Credit Facility contains financial covenants, certain of which are set forth below:


•	total debt to total assets may not exceed 0.60:1;


•	earnings before interest, taxes, depreciation and amortization to fixed charges may not be less than 1.50:1;


•	unsecured debt to unencumbered asset value must equal or be less than 60%; and


•	unencumbered net operating income to unsecured interest expense must equal or exceed 200%.

Activity

In February 2012, the Company closed on a mortgage with $45.0 million of available funds bearing interest at 4.84%. As of December 31, 2012, there was $34.6 million outstanding on this loan. The net proceeds from this mortgage were used for construction costs on a property under development.

In June 2012, the Company issued $400 million of 4.125% senior unsecured notes due 2022. The net proceeds from this issuance were used to repay borrowings under the Company's unsecured credit facility and for general corporate purposes.

In August 2012, the Company used proceeds from its unsecured credit facility together with available cash on hand to repay $230.1 million of 10-year, 6.375% senior unsecured notes due August 2012.

In December 2012, the Company issued $300 million of 3.375% senior unsecured notes due 2023. The net proceeds from this issuance were used to repay borrowings under the Company's unsecured credit facility and for general corporate purposes.

During the year ended December 31, 2011, the Company used proceeds from its Credit Facility together with available cash on hand to repay $246.5 million principal value of 7.25% senior notes.

During the year ended December 31, 2010, the Company used available cash and proceeds from its Credit Facility to repay $119.3 million principal value of mortgage loans. The weighted average interest rate of these loans as of March 31, 2010 was 7.3%. The Company incurred a $1.2 million prepayment penalty and wrote off $936,000 in deferred financing costs in conjunction with the prepayment of these loans. These costs are included as interest expense in the accompanying consolidated statements of comprehensive income.

During the year ended December 31, 2010, the Company used proceeds from its Credit Facility to repay $169.7 million principal value of 8.50% senior notes due August 2010.

During the year ended December 31, 2010, the Company issued $350 million of 10-year, 4.75% senior notes. The net proceeds from this issuance were used to repay borrowings under the Company's Credit Facility and for general corporate purposes.