Indebtedness

All debt is held directly or indirectly by the Partnership. The General Partner itself does not have any indebtedness, but does guarantee some of the unsecured debt of the Partnership.

Indebtedness at December 31, 2014 and 2013 consists of the following (in thousands):



	Maturity Date	Weighted Average Interest Rate		Weighted Average Interest Rate
	Maturity Date	2014		2013		2014		2013
Fixed rate secured debt	2015 to 2027	6.27	%	6.23	%	$	979,842	$	1,081,035
Variable rate secured debt	2025	0.13	%	2.11	%	3,400		19,089
Unsecured debt	2015 to 2028	5.22	%	5.36	%	3,364,161		3,066,252
Unsecured line of credit	2019	1.22	%	1.42	%	106,000		88,000
						$	4,453,403	$	4,254,376

Secured Debt

At December 31, 2014, our secured debt was collateralized by rental properties with a carrying value of $1.66 billion and by letters of credit in the amount of $3.5 million.

The fair value of our fixed rate secured debt at December 31, 2014 was $1.1 billion. Because our fixed rate secured debt is not actively traded in any marketplace, we utilized a discounted cash flow methodology to determine its fair value. Accordingly, we calculated fair value by applying an estimate of the current market rate to discount the debt's remaining contractual cash flows. Our estimate of a current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. The estimated rates ranged from 2.20% to 3.60%, depending on the attributes of the specific loans. The current market rates we utilized were internally estimated; therefore, we have concluded that our determination of fair value for our fixed rate secured debt was primarily based upon Level 3 inputs.

During 2014, we repaid nine secured loans, totaling $99.3 million. These loans had a weighted average stated interest rate of 5.56%.

We assumed three secured loans in conjunction with our acquisition activity in 2013. These assumed loans had a total face value of $99.3 million and a fair value of $103.6 million. These assumed loans had a weighted average remaining term at acquisition of 1.8 years and carry a weighted average stated interest rate of 5.59%. We used an estimated market interest rate of 3.00% in determining the fair value of these loans.

During the year ended December 31, 2013, we repaid twelve secured loans, at their maturity dates, totaling $153.8 million. These loans had a weighted average stated interest rate of 5.52%.

Unsecured Debt

At December 31, 2014, with the exception of the $250.0 million variable rate term note described below, all of our unsecured debt bore interest at fixed rates and primarily consisted of unsecured notes that are publicly traded. We utilized broker estimates in estimating the fair value of our fixed rate unsecured debt. Our unsecured notes are thinly traded and, in certain cases, the broker estimates were not based upon comparable transactions. The broker estimates took into account any recent trades within the same series of our fixed rate unsecured debt, comparisons to recent trades of other series of our fixed rate unsecured debt, trades of fixed rate unsecured debt from companies with profiles similar to ours, as well as overall economic conditions. We reviewed these broker estimates for reasonableness and accuracy, considering whether the estimates were based upon market participant assumptions within the principal and most advantageous market and whether any other observable inputs would be more accurate indicators of fair value than the broker estimates. We concluded that the broker estimates were representative of fair value. We have determined that our estimation of the fair value of our fixed rate unsecured debt was primarily based upon Level 3 inputs, as defined. The estimated trading values of our fixed rate unsecured debt, depending on the maturity and coupon rates, ranged from 101.00% to 127.00% of face value.

We utilize a discounted cash flow methodology in order to estimate the fair value of our variable rate term loan. The net present value of the difference between future contractual interest payments and future interest payments based on our estimate of a current market rate represents the difference between the book value and the fair value. Our estimate of a current market rate was based on estimated market spreads and the quoted yields on federal government treasury securities with similar maturity dates.

We took the following actions during 2014 and 2013 as it pertains to our unsecured indebtedness:


•	In November 2014, we issued $300.0 million of unsecured notes that bear interest at a stated rate of 3.75%, have an effective rate of 3.90%, and mature on December 1, 2024.


•	In December 2013, we issued $250.0 million of unsecured notes that bear interest at a stated rate of 3.875%, have an effective rate of 3.91%, and mature on February 15, 2021.

•

During the year ended December 31, 2013, we repaid three unsecured notes totaling $675.0 million. These notes had a weighted average effective rate of 6.37% and a weighted average stated rate of 5.57%. An unsecured note was repaid prior to its maturity date, and we incurred a loss on extinguishment of $9.4 million, which related to a make-whole payment to the bondholders as well as the write-off of unamortized deferred financing costs.

•

In May 2013, we issued and fully drew down on a term loan with an aggregate commitment of $250.0 million. In October 2014, we refinanced and extended the loan which previously bore an interest rate of LIBOR plus 1.35% and matured on May 14, 2018. It now bears interest at a variable rate of LIBOR plus 1.15% (equal to 1.31% for outstanding borrowings at December 31, 2014) and matures January 15, 2019.


•	In March 2013, we issued $250.0 million of unsecured notes that bear interest at 3.625%, have an effective rate of 3.72%, and mature on April 15, 2023.

The indentures (and related supplemental indentures) governing our outstanding series of notes also require us to comply with financial ratios and other covenants regarding our operations. We were in compliance with all such covenants at December 31, 2014.

Unsecured Line of Credit

Our unsecured line of credit at December 31, 2014 is described as follows (in thousands):



				Outstanding Balance at
Description	Borrowing Capacity		Maturity Date	December 31, 2014
Unsecured Line of Credit – Partnership	$	1,200,000	January 2019	$	106,000

In October 2014, we renewed and extended the Partnership's line of credit through January 2019 (with two six-month extension options) while increasing its borrowing capacity from $850.0 million to $1.20 billion. The Partnership's unsecured line of credit interest rate decreased from LIBOR plus 1.25% to LIBOR plus 1.05% (equal to 1.22% for borrowings at December 31, 2014) and has a maturity date of January 2019. Subject to certain conditions, the terms also include an option to increase the facility by up to an additional $400.0 million, for a total of up to $1.60 billion.

This line of credit provides us with an option to obtain borrowings from financial institutions that participate in the line at rates that may be lower than the stated interest rate, subject to certain restrictions.

This line of credit contains financial covenants that require us to meet certain financial ratios and defined levels of performance, including those related to fixed charge coverage, unsecured interest expense coverage and debt-to-asset value (with asset value being defined in the Partnership's unsecured line of credit agreement). At December 31, 2014, we were in compliance with all covenants under this line of credit.

To the extent that there are outstanding borrowings, we utilize a discounted cash flow methodology in order to estimate the fair value of our unsecured line of credit. The net present value of the difference between future contractual interest payments and future interest payments based on our estimate of a current market rate represents the difference between the book value and the fair value. Our estimate of a current market rate was based on estimated market spreads and the quoted yields on federal government treasury securities with similar maturity dates. The current market rate of 1.42% that we utilized was internally estimated; therefore, we have concluded that our determination of fair value for our unsecured line of credit was primarily based upon Level 3 inputs.

Changes in Fair Value

As all of our fair value debt disclosures relied primarily on Level 3 inputs, the following table summarizes the book value and changes in the fair value of our debt for the year ended December 31, 2014 (in thousands):



	Book Value at		Book Value at		Fair Value at		Issuances					Adjustments			Fair Value at
	December 31, 2013		December 31, 2014		December 31, 2013		and Assumptions		Payoffs			to Fair Value			December 31, 2014
Fixed rate secured debt	$	1,081,035	$	979,842	$	1,145,717	$	—	$	(97,188	)	$	16,772		$	1,065,301
Variable rate secured debt	19,089		3,400		19,089		—		(15,689		)	—			3,400
Unsecured debt	3,066,252		3,364,161		3,250,518		300,000		(2,092		)	55,049			3,603,475
Unsecured line of credit	88,000		106,000		88,383		18,000		—			(383		)	106,000
Total	$	4,254,376	$	4,453,403	$	4,503,707	$	318,000	$	(114,969	)	$	71,438		$	4,778,176

Scheduled Maturities and Interest Paid

At December 31, 2014, the scheduled amortization and maturities of all indebtedness, excluding fair value and other accounting adjustments, for the next five years and thereafter were as follows (in thousands):



Year	Amount
2015	$	441,061
2016	529,984
2017	554,840
2018	307,855
2019	881,374
Thereafter	1,735,633
	$	4,450,747

The amount of interest paid in 2014, 2013 and 2012 was $229.0 million, $254.2 million and $246.1 million, respectively. The amount of interest capitalized in 2014, 2013 and 2012 was $17.6 million, $16.8 million and $9.4 million, respectively