Indebtedness

6 Months Ended

Jun. 30, 2011

Indebtedness [Abstract]

Indebtedness

5. Indebtedness

     The following table discloses certain information regarding our indebtedness:

								Effective
	Outstanding						Interest	Interest
	Balance at						Rate at	Rate at
	June 30,			December 31,			June 30,	June 30,
	2011			2010			2011	2011	Maturity Date
Mortgage and Other Loans Payable, Net*	$	625,532		$	486,055		4.45% - 9.25%	4.45% -9.25%	January 2012 - October 2020
Unamortized Premiums*		(356	)		(358	)
Mortgage and Other Loans Payable, Gross	$	625,176		$	485,697
Senior Unsecured Notes, Net
2016 Notes	$	159,927		$	159,899		5.750%	5.91%		01/15/16
2017 Notes		87,199			87,195		7.500%	7.52%		12/01/17
2027 Notes		6,065			13,559		7.150%	7.11%		05/15/27
2028 Notes		140,276			189,869		7.600%	8.13%		07/15/28
2012 Notes		61,795			61,774		6.875%	6.85%		04/15/12
2032 Notes		34,675			34,667		7.750%	7.87%		04/15/32
2014 Notes		87,424			86,792		6.420%	6.54%		06/01/14
2011 Exchangeable Notes		128,645			128,137		4.625%	5.53%		09/15/11
2017 II Notes		117,653			117,637		5.950%	6.37%		05/15/17
Subtotal	$	823,659		$	879,529
Unamortized Discounts		5,720			6,980
Senior Unsecured Notes, Gross	$	829,379		$	886,509
Unsecured Credit Facility	$	100,000		$	376,184		3.436%	3.436%		09/28/12

* Excludes $1,008 of Mortgage Loan Payable on Real Estate Held for Sale, inclusive of $48 of unamortized premium as of December 31, 2010.

     On February 10, 2011, we paid off and retired prior to maturity our secured mortgage loan originally maturing in September 2012 in the amount of $14,520. On March 9, 2011, we paid off and retired prior to maturity our secured mortgage loan originally maturing in December 2014 in the amount of $18,662. On April 1, 2011, we paid off and retired prior to maturity our secured mortgage loan originally maturing in October 2014 in the amount of $27,389. In connection with the early payoffs, for the three and six months ended June 30, 2011, we recorded a loss on early retirement of debt of $1,104 and $2,130, respectively, related to prepayment premiums and the write-off of unamortized loan fees.

     On May 2, 2011, we obtained eight secured mortgage loans aggregating $178,300. The mortgage loans are cross-collateralized by 32 industrial properties totaling approximately 5.9 million square feet of GLA. The mortgage loans bear interest at a fixed rate of 4.45%, principal payments are amortized over 30 years and the loans mature in June 2018. Prepayments are prohibited for twelve months after loan origination, after which prepayment premiums are calculated at the greater of yield maintenance or 1% of the outstanding loan balance.

     On May 26, 2011, we assumed a secured mortgage loan in the amount of $24,417 in conjunction with the acquisition of an industrial property from the 2003 Net Lease Joint Venture. The mortgage loan is collateralized by one industrial property totaling approximately 0.7 million square feet of GLA. The mortgage loan bears interest at a fixed rate of 5.579%, principal payments are amortized over 30 years and the loan matures in February 2016.

     Included in Mortgage and Other Loans Payable is a $5,040 loan payable related to a non-recourse mortgage loan that matured on March 1, 2011. We are currently working with the lender to transfer title of the industrial building that serves as collateral in satisfaction of the loan. However, there can be no assurance that we will be successful in these efforts.

     As of June 30, 2011, Mortgage and Other Loans Payable are collateralized by, and in some instances cross-collateralized by, industrial properties with a net carrying value of $823,927 and one letter of credit in the amount of $889.

     During the three months ended June 30, 2011, we repurchased and retired the following senior unsecured notes prior to maturity:

	Principal Amount
	Repurchased		Purchase Price
2027 Notes	$	7,500	$	7,500
2028 Notes		49,630		48,946
	$	57,130	$	56,446

     In connection with these repurchases prior to maturity, we recognized $2,129 as loss on early retirement of debt for the three months ended June 30, 2011, which is the difference between the repurchase price of $56,446 and the principal amount retired of $57,130, net of the pro rata write off of the unamortized debt issue discount, the unamortized loan fees and the unamortized settlement amount of the interest rate protection agreements related to the repurchases of $39, $426 and $2,348, respectively.

     During June 2011, we made a permanent repayment of $100,000 on the term loan of our Unsecured Credit Facility.

     The following is a schedule of the stated maturities and scheduled principal payments as of June 30, 2011 of our indebtedness, exclusive of premiums and discounts, for the next five years ending December 31, and thereafter:

	Amount
Remainder of 2011	$	139,445
2012		175,420
2013		11,920
2014		155,901
2015		60,717
Thereafter		1,011,152
Total	$	1,554,555

     The Unsecured Credit Facility and the indentures under which our senior unsecured indebtedness is, or may be, issued contain certain financial covenants, including, among other things, coverage ratios and limitations on our ability to incur total indebtedness and secured and unsecured indebtedness. Consistent with our prior practice, we will, in the future, continue to interpret and certify our performance under these covenants in a good faith manner that we deem reasonable and appropriate. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our noteholders or lenders in a manner that could impose and cause us to incur material costs. Any violation of these covenants would subject us to higher finance costs and fees, or accelerated maturities. We believe that we were in compliance with these financial covenants as of June 30, 2011, and we anticipate that we will be able to operate in compliance with these financial covenants throughout 2011. In addition, our credit facilities and senior debt securities contain certain cross-default provisions, which are triggered in the event that our other material indebtedness is in default. Under the Unsecured Credit Facility, an event of default can also occur if the lenders, in their good faith judgment, determine that a material adverse change has occurred which could prevent timely repayment or materially impair our ability to perform our obligations under the loan agreement.

Fair Value

     At June 30, 2011 and December 31, 2010, the fair values of our indebtedness were as follows:

	June 30, 2011				December 31, 2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Mortgage and Other Loans Payable	$	625,532	$	669,822	$	487,063	$	548,696
Senior Unsecured Notes		823,659		835,847		879,529		851,771
Unsecured Credit Facility		100,000		100,306		376,184		376,184
Total	$	1,549,191	$	1,605,975	$	1,742,776	$	1,776,651

     The fair values of our mortgage and other loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made based upon similar leverage levels and similar remaining maturities. The fair value of the senior unsecured notes was determined by quoted market prices for the same or similar issuances. The fair value of the Unsecured Credit Facility was determined by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term, assuming no repayment until maturity.