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Mortgages and Notes Payable
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Mortgages and Notes Payable Mortgages and Notes Payable
Our mortgages and notes payable consisted of the following:
December 31,
20242023
Secured indebtedness (1):
5.69% mortgage loan due 2028$200,000 $200,000 
7.29% mortgage loan due 2028 (2)
44,965 45,000 
4.27% (3.61% effective rate) mortgage loan due 2028 (3)
107,584 110,391 
4.00% mortgage loan due 202984,712 87,003 
3.61% (3.19% effective rate) mortgage loan due 2029 (4)
84,054 84,360 
3.40% (3.50% effective rate) mortgage loan due 2033 (5)
69,575 69,524 
4.60% (3.73% effective rate) mortgage loan due 2037 (6)
121,296 124,474 
712,186 720,752 
Unsecured indebtedness:
3.875% (4.038% effective rate) notes due 2027 (7)
299,134 298,734 
4.125% (4.271% effective rate) notes due 2028 (8)
348,690 348,276 
4.200% (4.234% effective rate) notes due 2029 (9)
349,583 349,484 
3.050% (3.079% effective rate) notes due 2030 (10)
399,498 399,400 
2.600% (2.645% effective rate) notes due 2031 (11)
399,048 398,892 
7.650% (7.836% effective rate) notes due 2034 (12)
345,862 345,407 
Variable rate term loan due 2026 (13)
200,000 200,000 
Variable rate term loan due 2027 (13)
150,000 150,000 
Revolving credit facility due 2028 (14)
104,000 20,000 
2,595,815 2,510,193 
Less-unamortized debt issuance costs(14,442)(17,739)
Total mortgages and notes payable, net$3,293,559 $3,213,206 
__________
(1)Our secured mortgage loans were collateralized by real estate assets with an undepreciated book value of $1,245.0 million as of December 31, 2024. We paid down $7.1 million of secured loan balances through principal amortization during 2024.
(2)The borrower under this loan is our Midtown West joint venture, a consolidated 80.0% owned joint venture. See Note 4.
(3)Net of unamortized fair market value premium of $2.1 million and $2.7 million as of December 31, 2024 and 2023, respectively.
(4)Net of unamortized fair market value premium of $1.4 million and $1.7 million as of December 31, 2024 and 2023, respectively.
(5)Net of unamortized fair market value discount of $0.4 million and $0.5 million as of December 31, 2024 and 2023, respectively.
(6)Net of unamortized fair market value premium of $8.0 million and $8.6 million as of December 31, 2024 and 2023, respectively.
(7)Net of unamortized original issuance discount of $0.9 million and $1.3 million as of December 31, 2024 and 2023, respectively.
(8)Net of unamortized original issuance discount of $1.3 million and $1.7 million as of December 31, 2024 and 2023, respectively.
(9)Net of unamortized original issuance discount of $0.4 million and $0.5 million as of December 31, 2024 and 2023, respectively.
(10)Net of unamortized original issuance discount of $0.5 million and $0.6 million as of December 31, 2024 and 2023, respectively.
(11)Net of unamortized original issuance discount of $1.0 million and $1.1 million as of December 31, 2024 and 2023, respectively.
(12)Net of unamortized original issuance discount of $4.1 million and $4.6 million as of December 31, 2024 and 2023, respectively.
(13)The interest rate was 5.35% as of December 31, 2024.
(14)The interest rate was 5.25% as of December 31, 2024.
The following table sets forth scheduled future principal payments, including amortization, due on our mortgages and notes payable as of December 31, 2024:
Years Ending December 31,Amount
2025$7,156 
2026206,922 
2027458,976 
2028803,168 
2029517,267 
Thereafter1,314,512 
Less-unamortized debt issuance costs(14,442)
$3,293,559 

Our $750.0 million unsecured revolving credit facility was modified during the first quarter of 2024 and is now scheduled to mature in January 2028 (but can be extended for two additional six-month periods at our option assuming no defaults have occurred). The interest rate on our revolving credit facility is SOFR plus a related spread adjustment of 10 basis points and a borrowing spread of 85 basis points, based on current credit ratings. The annual facility fee is 20 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody’s Investors Service or Standard & Poor’s Ratings Services. We incurred $7.7 million of debt issuance costs during the first quarter of 2024, which will be amortized along with certain existing unamortized debt issuance costs over the remaining term of our new revolving credit facility and recorded $0.2 million of loss on debt extinguishment. During the second quarter of 2024, we modified the revolving credit facility to provide that the interest rate may be adjusted upward or downward by 2.5 basis points depending upon whether or not we achieve certain pre-determined sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. There was $104.0 million and $119.0 million outstanding under our revolving credit facility as of December 31, 2024 and January 31, 2025, respectively. As of both December 31, 2024 and January 31, 2025, we had $0.1 million of outstanding letters of credit, which reduce the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility as of December 31, 2024 and January 31, 2025 was $645.9 million and $630.9 million, respectively.

During 2023, the Operating Partnership issued $350.0 million aggregate principal amount of 7.650% notes due February 2034, less original issuance discount of $4.6 million. These notes were priced to yield 7.836%. During 2023, we obtained an aggregate of $200.0 million notional amount of forward-starting swaps that effectively locked the underlying 10-year treasury rate at 4.498%. Upon the subsequent issuance of the notes, we terminated the forward-starting swaps and paid cash upon settlement. The unrealized loss of $0.5 million will be classified to interest expense as interest payments are made on the debt. Underwriting fees and other expenses totaled $3.2 million and will be amortized over the term of the notes. The net proceeds from the issuance were used: (1) to prepay, without penalty, a $200.0 million unsecured bank term loan that was scheduled to mature in October 2024; (2) to repay amounts outstanding under our revolving credit facility; and (3) for general corporate purposes. We recorded $0.6 million of loss on debt extinguishment related to the term loan prepayment.

During 2023, we obtained a $200.0 million, five-year secured mortgage loan from a third party lender, with an effective fixed interest rate of 5.69%. This loan is scheduled to mature in April 2028. We incurred $1.3 million of debt issuance costs, which will be amortized over the term of the loan.

During 2022, we obtained a $200.0 million, two-year unsecured bank term loan that was originally scheduled to mature in October 2024. This loan was prepaid in full without penalty during the fourth quarter of 2023. The interest rate, based on current credit ratings, was SOFR plus a related spread adjustment of 10 basis points and a borrowing spread of 95 basis points. The interest rate was based on the higher of the publicly announced ratings from Moody’s Investors Service or Standard & Poor’s Ratings Services. We were entitled to a temporary reduction in the interest rate of one basis point provided we met certain sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. We used the additional $200.0 million of borrowings, together with available cash and borrowings under our revolving credit facility, to prepay without penalty $250.0 million principal amount of 3.625% unsecured notes that were scheduled to mature in January 2023.

During 2022, we modified our other $200.0 million unsecured bank term loan to extend the maturity date from November 2022 to May 2026. As part of this modification, we also obtained a $150.0 million delayed-draw term loan, which was drawn in its entirety in the third quarter of 2022, that is scheduled to mature in May 2027. The interest rate, based on current credit ratings, is SOFR plus a related spread adjustment of 10 basis points and a borrowing spread of 95 basis points. The interest rate is based on the higher of the publicly announced ratings from Moody’s Investors Service or Standard & Poor’s Ratings
Services. Subject to written consent of the lenders, we may elect to amend this term loan no later than May 15, 2024 to provide that the interest rate may be adjusted upward or downward by up to 2.5 basis points subject to satisfaction of certain to-be-determined sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. We incurred $2.7 million of debt issuance costs, which are being amortized along with certain existing unamortized debt issuance costs over the remaining term of our modified term loan.

We previously entered into floating-to-fixed interest rate swaps through January 2022 with respect to an aggregate of $50.0 million LIBOR-based borrowings. These swaps effectively fixed the underlying one-month LIBOR rate at a weighted average rate of 1.693%. During 2022, these interest rate swaps expired.

We are currently in compliance with financial covenants with respect to our consolidated debt.

Our revolving credit facility and bank term loans require us to comply with customary operating covenants and various financial requirements. Upon an event of default on the revolving credit facility, the lenders having at least 51.0% of the total commitments under the revolving credit facility can accelerate all borrowings then outstanding, and we could be prohibited from borrowing any further amounts under our revolving credit facility, which would adversely affect our ability to fund our operations. In addition, certain of our unsecured debt agreements contain cross-default provisions giving the unsecured lenders the right to declare a default if we are in default under more than $35.0 million with respect to other loans in some circumstances.

The Operating Partnership had $2,141.8 million carrying amount of various notes outstanding as of December 31, 2024, as detailed in the table above. The indenture that governs these outstanding notes requires us to comply with customary operating covenants and various financial ratios. The trustee or the holders of at least 25.0% in principal amount of any series of notes can accelerate the principal amount of such series upon written notice of a default that remains uncured after 60 days.

We have considered our short-term liquidity needs within one year from February 11, 2025 (the date of issuance of the annual financial statements) and the adequacy of our estimated cash flows from operating activities and other available financing sources to meet these needs. Importantly, we have no scheduled debt maturities during such one-year period. We have concluded it is probable we will meet these short-term liquidity requirements through a combination of the following:

•available cash and cash equivalents;

•cash flows from operating activities;

•issuance of debt securities by the Operating Partnership;

•issuance of secured debt;

•bank term loans;

•borrowings under our revolving credit facility;

•issuance of equity securities by the Company or the Operating Partnership; and

•the disposition of non-core assets.

Capitalized Interest

Total interest capitalized to wholly-owned and joint venture development and significant building and tenant improvement projects was $8.5 million, $9.0 million and $4.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.