5. Mortgage Loans, Construction Loan, Delayed Draw Term Loan and Interest Rate Swaps

*Variable rate loans for which INDUS has entered into interest rate swap agreements to effectively fix the interest rates on these loans to the rates reflected above.

INDUS’ weighted average interest rate on its mortgage loans, delayed draw term loan and construction loan, including the effect of its interest rate swap agreements, was 4.13% and 3.76% as of December 31, 2022 and 2021, respectively.

The aggregate annual principal payment requirements under the terms of the nonrecourse mortgage loans for the years 2023 through 2027 are $2,286, $2,381, $2,484, $2,589 and $12,183, respectively. The aggregate book value of land and buildings that are collateral for the nonrecourse mortgage loans was $87,578 at December 31, 2022.

On April 21, 2022, INDUS entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) for a $250,000 secured credit facility (the “Credit Facility”), amending and restating the $100,000 credit facility (the “Revolving Credit Facility”) executed on August 5, 2021 (the “Original Credit Facility”) (see Note 6) to include the addition of a delayed draw term loan facility (the “DDTL Facility”) of $150,000 for a term of five years, pursuant to which up to three separate draws may be made prior to April 21, 2023.

The Company made the first two of such draws under the DDTL Facility in May 2022 and December 2022 and as of December 31, 2022, INDUS had drawn $90,000 under the DDTL Facility (see Note 6). The Company used a portion of these proceeds to repay four of its nonrecourse mortgage loans, that had encumbered ten buildings, in the amount of $61,787, resulting in a loss on early extinguishment of debt of $464. In connection with the repayments, the Company also terminated associated interest rate hedges resulting in a gain of $1,227 recorded against interest expense and recognized an income tax benefit of $585 related to the reclassification of gains included in other comprehensive income for the year ended December 31, 2022 (see Note 9). As of December 31, 2022, the carrying amount of the DDTL

Facility is $88,713 including the net debt issuance costs related to the DDTL Facility of $1,287. The ten buildings previously encumbered by the nonrecourse mortgage loans that were prepaid (as discussed above) were added to the borrowing base of the Company’s Credit Facility.

The DDTL Facility bears interest at the Secured Overnight Financing Rate (“SOFR”) plus 1.15%, based on the Company’s ratio of total indebtedness to total assets. Concurrent with the closing on the DDTL Facility, the Company entered into an interest rate swap agreement to fix the interest rate on the DDTL Facility at an effective rate of 4.15%.

On August 25, 2022, INDUS repaid its construction loan (the “JPM Construction Loan”) with JPMorgan, which had provided the funds for the site work and development of 9817 Old Statesville Road, Charlotte, North Carolina and had commenced on May 7, 2021. The JPM Construction Loan was due on May 7, 2023. Initial interest under the JPM Construction Loan, adjusted monthly, was one-month LIBOR plus 1.65%, reduced upon completion of the building. Rental payments by the tenant commenced in October 2021. The final certificate of occupancy was received in the first quarter of 2022 and the interest rate on the JPM Construction Loan was reduced to one-month LIBOR plus 1.40% at that time. INDUS paid the principal amount then outstanding of $26,342 and wrote off $189 of unamortized financing costs recorded as a loss on early extinguishment of debt for the year ended December 31, 2022.

The following table summarizes the notional and fair values of our interest rate swaps designated as cash flow hedges at December 31, 2022 and December 31, 2021:


							Fair Value of Interest Rate
			LIBOR	SOFR	Current Notional Value		Derivative Assets/(Liabilities)
Effective	Maturity		Interest	Interest	December 31,	December 31,	December 31,	December 31,
Date	Date		Strike Rate	Strike Rate	2022	2021	2022	2021

July 1, 2022	April 21, 2027		n/a	2.933%	$ 90,000	$ -	$ 4,704	$ -

March 15, 2017	March 1, 2027	(a)	2.501%	n/a	10,290	10,621	522	(641)
February 1, 2018	February 1, 2028	(a)	2.782%	n/a	6,376	6,524	324	(641)

January 2, 2020	January 1, 2030		1.849%	n/a	6,007	6,182	621	(219)

July 1, 2020	July 1, 2030		0.942%	n/a	4,778	4,914	800	188

September 1, 2013	September 1, 2023	(b)	2.840%	n/a	-	7,204	-	(249)
January 1, 2015	January 1, 2025	(b)	2.260%	n/a	-	9,068	-	(390)
January 1, 2016	January 1, 2025	(b)	1.932%	n/a	-	1,552	-	(40)

September 1, 2015	September 1, 2025	(c)	2.118%	n/a	-	9,608	-	(334)
December 10, 2015	September 1, 2025	(c)	2.015%	n/a	-	2,185	-	(68)
November 17, 2016	November 17, 2026	(c)	2.085%	n/a	-	11,359	-	(518)

May 3, 2016	May 1, 2026		1.910%	n/a	-	12,291	-	(369)

July 14, 2017	August 1, 2027		4.390%	n/a	-	9,476	-	(526)

					$ 117,451	$ 90,984	$ 6,971	($ 3,807)

(a) (b) and (c) represent multiple interest rate swap agreements against a single mortgage

In July 2017, the Financial Conduct Authority in the United Kingdom, which regulates the London Interbank Offered Rate (“LIBOR”), announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after June 30, 2023. INDUS currently expects LIBOR-indexed rates to be available through that date, however, it is possible that they will become unavailable prior to that time. The interest rate on INDUS’ floating rate debt under nonrecourse mortgage loans is based on LIBOR, however, INDUS entered into interest rate swap agreements whereby the floating LIBOR rates under all mortgage loans are hedged, effectively fixing the interest rate on those loans. INDUS’ loan documents contain provisions that contemplate alternative methods to determine the base rate applicable to our

LIBOR-indexed debt to the extent LIBOR-indexed rates are not available. INDUS will continue to monitor and evaluate the impact, if any, on debt payments and the value of the Company’s floating rate debt.

On December 1, 2021, INDUS repaid two of its nonrecourse mortgage loans with the proceeds from the Blue Hills Sale (see Note 4). The first nonrecourse loan, collateralized by 1985 BHA, had a principal amount then outstanding of $4,759 and the Company incurred $1,226 in debt extinguishment costs. The second nonrecourse loan, collateralized by two industrial/logistics buildings, 20 and 25 International Drive, in Windsor, Connecticut had a principal amount then outstanding of $3,335 and the Company incurred $873 in debt extinguishment costs.

On November 16, 2021, INDUS repaid its nonrecourse mortgage loan collateralized by 5&7 WSC with the proceeds from the 5&7 WSC Sale (see Note 4). INDUS paid the principal amount then outstanding of $3,961 and incurred $15 in debt extinguishment costs. INDUS also paid $66 in connection with the termination of an associated interest rate swap agreement, which was recorded as interest expense.

The Company accounts for its interest rate swap agreements as effective cash flow hedges (see Notes 1 and 3). Amounts in AOCI will be reclassified into interest expense over the term of the swap agreements to achieve fixed rates on each mortgage. None of the interest rate swap agreements contain any credit risk related contingent features. In 2022 and 2021, INDUS recognized gains, included in other comprehensive income, of $10,193 and $4,945, respectively, on its interest rate swap agreements.

As of December 31, 2022, $3,230 is expected to be reclassified over the next twelve months to AOCI from interest expense. As of December 31, 2022, the fair value of the Company’s interest rate swap agreements was an asset of $6,971. As of December 31, 2021, the net fair value of the Company’s interest rate swap agreements was a liability of $3,807, with $188 included in assets and $3,995 included in liabilities on INDUS’ consolidated balance sheet. Total interest expense recognized during the years ended December 31, 2022 and December 31, 2021 was $4,734 and $6,877, respectively, of which, ($671) and $2,082, respectively, was recognized related to interest rate swaps.