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, 2015 and 2014 consists of the following (in thousands):



	Maturity Date	Weighted Average Interest Rate		Weighted Average Interest Rate
	Maturity Date	2015		2014		2015		2014
Fixed rate secured debt	2016 to 2027	6.55	%	6.27	%	$	736,896	$	979,842
Variable rate secured debt	2025	0.03	%	0.13	%	3,100		3,400
Unsecured debt	2016 to 2028	4.63	%	5.22	%	2,530,743		3,364,161
Unsecured line of credit	2019	1.41	%	1.22	%	71,000		106,000
						$	3,341,739	$	4,453,403
Less secured debt related to real estate assets held-for-sale						—		40,764
Total indebtedness as reported on consolidated balance sheets						$	3,341,739	$	4,412,639

Secured Debt

At December 31, 2015, our secured debt was collateralized by rental properties with a carrying value of $1.19 billion and by a letter of credit in the amount of $3.2 million.

The fair value of our fixed rate secured debt at December 31, 2015 was $789.1 million. 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 2.40% to 3.90%, 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 2015, we repaid 17 secured loans, totaling $231.2 million. These loans had a weighted average stated interest rate of 5.41%. Certain of these secured loans were repaid prior to their scheduled maturity date, which resulted in a $3.7 million loss on extinguishment, which included both prepayment penalties as well as the write-off of unamortized deferred loan and mark to market costs.

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

Unsecured Debt

At December 31, 2015, 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 98.00% to 124.00% 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 2015 and 2014 as it pertains to our unsecured indebtedness:


•	In February 2015, we repaid a $250.0 million senior unsecured note at its maturity date. This loan had a stated interest rate of 7.38% and an effective rate of 7.50%.

•

In April 2015, the Partnership completed the previously described Tender Offer to purchase, for a combined aggregate purchase price (exclusive of accrued and unpaid interest) of up to $500.0 million, certain of its outstanding series of unsecured notes. A portion of the proceeds from the Suburban Office Portfolio Sale were used to fund the Tender Offer, which resulted in the repurchase of notes having a face value of $424.9 million, for a cash payment of $500.0 million. The repurchased notes had contractual maturity dates ranging between February 2017 and March 2020 and bore interest at stated rates ranging between 5.95% and 8.25%.


•	In May 2015, we repurchased unsecured notes with a face value of $6.3 million, for a cash payment of $7.1 million. These notes had a stated interest rate of 6.50% and an effective rate of 6.08%.


•	In October 2015, we redeemed $150.0 million in unsecured notes that had a scheduled maturity in March 2016, for a cash payment of $152.6 million. These notes had a stated interest rate of 5.50% and an effective rate of 6.72%.


•	During 2015, the early repayment of unsecured notes, either through the Tender Offer or repurchase, resulted in an aggregate loss on extinguishment of $82.0 million, which included applicable repurchase premiums as well as the write-off of unamortized deferred loan costs.


•	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.

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, 2015.

Unsecured Line of Credit

Our unsecured line of credit at December 31, 2015 is described as follows (in thousands):



				Outstanding Balance at
Description	Borrowing Capacity		Maturity Date	December 31, 2015
Unsecured Line of Credit – Partnership	$	1,200,000	January 2019	$	71,000

The Partnership's unsecured line of credit has an interest rate on borrowings of LIBOR plus 1.05% (equal to 1.41% for borrowings at December 31, 2015) 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 $1.6 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, 2015, 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 1.61% 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, 2015 (in thousands):



	Book Value at 12/31/2014		Book Value at 12/31/2015		Fair Value at 12/31/2014		Payments/Payoffs			Adjustments to Fair Value			Fair Value at 12/31/2015
Fixed rate secured debt	$	979,842	$	736,896	$	1,065,301	$	(241,114	)	$	(35,092	)	$	789,095
Variable rate secured debt	3,400		3,100		3,400		(300		)	—			3,100
Unsecured debt	3,364,161		2,530,743		3,603,475		(833,417		)	(145,263		)	2,624,795
Unsecured line of credit	106,000		71,000		106,000		(35,000		)	(148		)	70,852
Total	$	4,453,403	$	3,341,739	$	4,778,176	$	(1,109,831	)	$	(180,503	)	$	3,487,842
Less secured debt related to real estate assets held-for-sale	40,764		—
Total indebtedness as reported on consolidated balance sheets	$	4,412,639	$	3,341,739

Scheduled Maturities and Interest Paid

At December 31, 2015, 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
2016	$	357,037
2017	350,295
2018	293,379
2019	725,912
2020	134,041
Thereafter	1,480,252
	$	3,340,916

The amount of interest paid in 2015, 2014 and 2013 was $211.8 million, $229.0 million and $254.2 million, respectively. The amount of interest capitalized in 2015, 2014 and 2013 was $16.8 million, $17.6 million and $16.8 million, respectively.