XML 72 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Secured and unsecured senior debt (Notes)
12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Secured and unsecured senior debt
Secured and unsecured senior debt

The following table summarizes our secured and unsecured senior debt as of December 31, 2018 (dollars in thousands):
 
Fixed Rate/Hedged
Variable-Rate Debt
 
Unhedged
Variable-Rate Debt
 
 
 
 
 
Weighted-Average
 
 
 
 
 
 
 
Interest Rate(1)
 
Remaining Term
(in years)
 
 
 
Total
 
Percentage
 
 
Secured notes payable
$
587,444

 
$
43,103

 
$
630,547

 
11.5
%
 
4.22
%
 
3.1
Unsecured senior notes payable
4,292,293

 

 
4,292,293

 
78.4

 
4.15

 
6.4
$2.2 billion unsecured senior line of credit
100,000

 
108,000

 
208,000

 
3.8

 
3.07

 
5.1
Unsecured senior bank term loan
347,415

 

 
347,415

 
6.3

 
2.21

 
5.1
Total/weighted average
$
5,327,152

 
$
151,103

 
$
5,478,255

 
100.0
%
 
3.99
%
 
5.9
Percentage of total debt
97
%
 
3
%
 
100
%
 
 
 
 
 
 


(1)
Represents the weighted-average interest rate as of the end of the applicable period, including expense/income related to our interest rate hedge agreements, amortization of loan fees, amortization of debt premiums (discounts), and other bank fees.
The following table summarizes our outstanding indebtedness and respective principal payments as of December 31, 2018 (dollars in thousands):
 
 
Stated 
Rate
 
Interest Rate(1)
 
Maturity
 
 
 
 
Unamortized (Deferred Financing Cost), (Discount) Premium
 
 
Debt
 
 
 
Date(2)
 
 
Principal
 
 
Total
Secured notes payable
 
 
 
 
 
 
 
 
 
 
 
 
 
Greater Boston
 
L+1.50
%
 
3.29
%
 
1/28/20
(3) 
 
$
193,103

 
$
(57
)
 
$
193,046

Greater Boston, San Diego, Seattle, and Maryland
 
7.75
%
 
8.15

 
4/1/20
(4) 
 
106,661

 
(418
)
 
106,243

San Diego
 
4.66
%
 
4.91

 
1/1/23
 
 
33,501

 
(263
)
 
33,238

Greater Boston
 
3.93
%
 
3.19

 
3/10/23
 
 
80,909

 
2,303

 
83,212

Greater Boston
 
4.82
%
 
3.40

 
2/6/24
 
 
200,517

 
13,540

 
214,057

San Francisco
 
6.50
%
 
6.50

 
7/1/36
 
 
751

 

 
751

Secured debt weighted-average interest rate/subtotal
 
4.94
%
 
4.22

 
 
 
 
615,442

 
15,105

 
630,547

 
 
 
 
 
 
 
 
 
 
 
 
 
 
$2.2 billion unsecured senior line of credit
 
L+0.825
%
 
3.07

 
1/28/24
 
 
208,000

 

 
208,000

Unsecured senior bank term loan
 
L+0.90
%
 
2.21

 
1/28/24
 
 
350,000

 
(2,585
)
 
347,415

Unsecured senior notes payable
 
2.75
%
 
2.96

 
1/15/20
 
 
400,000

 
(845
)
 
399,155

Unsecured senior notes payable
 
4.60
%
 
4.75

 
4/1/22
 
 
550,000

 
(2,115
)
 
547,885

Unsecured senior notes payable
 
3.90
%
 
4.04

 
6/15/23
 
 
500,000

 
(2,653
)
 
497,347

Unsecured senior notes payable
 
4.00
%
 
4.18

 
1/15/24
 
 
450,000

 
(3,685
)
 
446,315

Unsecured senior notes payable
 
3.45
%
 
3.62

 
4/30/25
 
 
600,000

 
(5,526
)
 
594,474

Unsecured senior notes payable
 
4.30
%
 
4.50

 
1/15/26
 
 
300,000

 
(3,414
)
 
296,586

Unsecured senior notes payable
 
3.95
%
 
4.13

 
1/15/27
 
 
350,000

 
(4,037
)
 
345,963

Unsecured senior notes payable
 
3.95
%
 
4.07

 
1/15/28
 
 
425,000

 
(3,818
)
 
421,182

Unsecured senior notes payable
 
4.50
%
 
4.60

 
7/30/29
 
 
300,000

 
(2,344
)
 
297,656

Unsecured senior notes payable
 
4.70
%
 
4.81

 
7/1/30
 
 
450,000

 
(4,270
)
 
445,730

Unsecured debt weighted average/subtotal
 
 
 
3.96

 
 
 
 
4,883,000

 
(35,292
)
 
4,847,708

Weighted-average interest rate/total
 
 
 
3.99
%
 
 
 
 
$
5,498,442

 
$
(20,187
)
 
$
5,478,255


(1)
Represents the weighted-average interest rate as of the end of the applicable period, including expense/income related to our interest rate hedge agreements, amortization of loan fees, amortization of debt premiums (discounts), and other bank fees.
(2)
Reflects any extension options that we control.
(3)
We have the option to extend the stated maturity date to January 28, 2021, subject to certain conditions.
(4)
In January 2019, we repaid this secured note payable and recognized a loss on early extinguishment of debt of $7.1 million, including the write-off of unamortized loan fees.
Amendment of unsecured senior line of credit and unsecured senior bank term loan

On September 28, 2018, we amended our unsecured senior line of credit and unsecured senior bank term loan to extend the maturity date of each to January 28, 2024, including two six-month extension options related to our unsecured senior line of credit, and to increase the aggregate commitment for our unsecured senior line of credit to $2.2 billion from $1.65 billion.

As a result of the amendment and improvement in our credit rating from Moody’s Investors Service during the third quarter of 2018, the overall applicable interest rate margin decreased to 0.825% from 1.00% for our $2.2 billion unsecured senior line of credit, and to 0.90% from 1.10% for our unsecured senior bank term loan. The facility fee related to our $2.2 billion unsecured senior line of credit also decreased to 0.15% from 0.20%. In connection with these amendments, we recognized a loss on early extinguishment of debt of approximately $634 thousand related to the write-off of unamortized loan fees.

We use our $2.2 billion unsecured senior line of credit to fund working capital, construction activities, and, from time to time, acquisition of properties. Borrowings under the $2.2 billion unsecured senior line of credit will bear interest at a “Eurocurrency Rate,” a “LIBOR Floating Rate, or a “Base Rate” specified in the amended $2.2 billion unsecured senior line of credit agreement plus, in any case, the Applicable Margin. The Eurocurrency Rate specified in the amended $2.2 billion unsecured senior line of credit agreement is, as applicable, the rate per annum equal to either (i) the LIBOR or a successor rate thereto as agreed to by the administrative agent and the Company for loans denominated in a LIBOR quoted currency (i.e., U.S. dollars, euro, sterling, or yen), (ii) the average annual yield rates applicable to Canadian dollar bankers’ acceptances for loans denominated in Canadian dollars, (iii) the Bank Bill Swap Reference Bid rate for loans denominated in Australian dollars, or (iv) the rate designated with respect to the applicable alternative currency for loans denominated in a non-LIBOR quoted currency (other than Canadian or Australian dollars). The LIBOR Floating Rate means, for any day, one month LIBOR, or a successor rate thereto as agreed to by the administrative agent and the Company for loans denominated in U.S. dollars. The Base Rate means, for any day, a fluctuating rate per annum equal to the highest of (i) the federal funds rate plus 1/2 of 1.00%, (ii) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (iii) the Eurocurrency Rate plus 1.00%. Our $2.2 billion unsecured senior line of credit contains a feature that allows lenders to competitively bid on the interest rate for borrowings under the facility. This may result in an interest rate that is below the stated rate. In addition to the cost of borrowing, the facility is subject to an annual facility fee of 0.15% based on the aggregate commitments outstanding.

Repayment of unsecured senior bank term loan

During the three months ended September 30, 2018, we repaid the remaining $200.0 million balance under our 2019 unsecured senior bank term loan and recognized a loss on early extinguishment of debt of $189 thousand related to the write-off of unamortized loan fees.
Unsecured senior notes payable

As of December 31, 2018, we have unsecured senior notes payable aggregating $4.3 billion, which are unsecured obligations of the Company and are fully and unconditionally guaranteed by Alexandria Real Estate Equities, L.P., a 100% owned subsidiary of the Company. The unsecured senior notes payable rank equally in right of payment with all other senior unsecured indebtedness. However, the unsecured senior notes payable are subordinate to existing and future mortgages and other secured indebtedness (to the extent of the value of the collateral securing such indebtedness) and to all existing and future preferred equity and liabilities, whether secured or unsecured, of the Company’s subsidiaries, other than Alexandria Real Estate Equities, L.P. In addition, the terms of the indentures, among other things, limit the ability of the Company, Alexandria Real Estate Equities, L.P., and the Company’s subsidiaries to (i) consummate a merger, or consolidate or sell all or substantially all of the Company’s assets, and (ii) incur certain secured or unsecured indebtedness.
 
4.00% and 4.70% unsecured senior notes payables

In June 2018, we completed an offering of $900.0 million of unsecured senior notes for net proceeds of $891.4 million. The offering consisted of $450.0 million of 4.00% unsecured senior notes payable on January 15, 2024, which will be used to fund certain eligible green development and redevelopment projects that have received or are expected to receive LEED® Gold or Platinum certification, and $450.0 million of 4.70% unsecured senior notes payable on July 1, 2030.
Repayment of secured construction loan

In July 2018, we repaid $150.0 million of the outstanding balance of our secured construction loan and reduced aggregate commitments to $200.0 million. In connection with the partial repayment of the secured construction loan, we recognized a loss on early extinguishment of debt of $299 thousand related to the write-off of unamortized loan fees.
Interest expense

Interest expense for the years ended December 31, 2018, 2017, and 2016, consisted of the following (dollars in thousands):
 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
Interest incurred
 
$
223,715

 
$
186,867

 
$
159,403

Capitalized interest
 
(66,220
)
 
(58,222
)
 
(52,450
)
Interest expense
 
$
157,495

 
$
128,645

 
$
106,953