DEBT (Tables)
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6 Months Ended |
Jun. 30, 2023 |
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| Debt Disclosure [Abstract] |
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| Schedule of Debt |
A summary of our consolidated debt is as follows: | | | | | | | | | | | | | | | Weighted-Average | | | | | | | | | | | Effective Interest Rate as of | | | | Balance as of | | | June 30, | | December 31, | | | | June 30, | | December 31, | ($ in thousands) | | 2023 | | 2022 | | Current Maturity Date | | 2023 | | 2022 | Line of credit (1) | | 5.17 | % | 5.72 | % | November 2025 | | $ | 352,000 | | $ | 235,000 | Term loan (2) | | 3.31 | | 3.90 | | November 2026 | | | 400,000 | | | 400,000 | Term loan (3) | | 4.26 | | 4.56 | | January 2027 | | | 400,000 | | | 400,000 | Fixed-rate mortgage notes | | 3.40 | | 3.48 | | January 2027 - May 2031 | | | 309,875 | | | 380,316 | Floating-rate mortgage notes (4) | | 4.59 | | 4.52 | | October 2024 - October 2026 | | | 207,600 | | | 207,600 | Total principal amount / weighted-average (5) | | 4.11 | % | 4.31 | % | | | $ | 1,669,475 | | $ | 1,622,916 | Less: unamortized debt issuance costs | | | | | | | | $ | (12,751) | | $ | (14,849) | Add: unamortized mark-to-market adjustment on assumed debt | | | | | | | | | 7,887 | | | 8,408 | Total debt, net | | | | | | | | $ | 1,664,611 | | $ | 1,616,475 | Gross book value of properties encumbered by debt | | | | | | | | $ | 895,040 | | $ | 970,310 |
| (1) | The effective interest rate is calculated based on the Term Secured Overnight Financing Rate (”Term SOFR”) plus an 11.448 basis point adjustment (“Adjusted Term SOFR”), plus a margin ranging from 1.25% to 2.00% depending on our consolidated leverage ratio. As of June 30, 2023, the unused and available portions under the line of credit were approximately $548.0 million and $547.9 million, respectively. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate cap agreements relating to $150.0 million in borrowings under this line of credit. The line of credit is available for general business purposes including, but not limited to, refinancing of existing indebtedness and financing the acquisition of permitted investments, including commercial properties. |
| (2) | The effective interest rate is calculated based on Adjusted Term SOFR, plus a margin ranging from 1.20% to 1.90% depending on our consolidated leverage ratio. Total commitments for this term loan are $400.0 million. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to $300.0 million in borrowings under this term loan and an interest rate cap agreement relating to $100.0 million in borrowings under this term loan. |
| (3) | The effective interest rate is calculated based on Adjusted Term SOFR, plus a margin ranging from 1.20% to 1.90% depending on our consolidated leverage ratio. Total commitments for this term loan are $400.0 million. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to $350.0 million in borrowings under this term loan and an interest rate cap agreement relating to $50.0 million in borrowings under this term loan. |
| (4) | The effective interest rate is calculated based on either the London Interbank Offered Rate (“LIBOR”) or Adjusted Term SOFR plus a margin. As of both June 30, 2023 and December 31, 2022, our floating-rate mortgage notes were subject to interest rate spreads ranging from 1.55% to 2.50%. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate cap agreements which capped the effective interest rates of our two floating-rate mortgage notes at 4.61% and 4.55%, respectively, as of June 30, 2023. |
| (5) | The weighted-average remaining term of our consolidated borrowings was approximately 3.4 years as of June 30, 2023, excluding the impact of certain extension options. |
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| Schedule of Maturities of Long-term Debt |
As of June 30, 2023, the principal payments due on our consolidated debt during each of the next five years and thereafter were as follows: | | | | | | | | | | | | | (in thousands) | | Line of Credit (1) | | Term Loans | | Mortgage Notes (2) | | Total | Remainder of 2023 | | | — | | | — | | | 996 | | | 996 | 2024 | | | — | | | — | | | 129,265 | | | 129,265 | 2025 | | | 352,000 | | | — | | | 2,360 | | | 354,360 | 2026 | | | — | | | 400,000 | | | 84,214 | | | 484,214 | 2027 | | | — | | | 400,000 | | | 175,787 | | | 575,787 | Thereafter | | | — | | | — | | | 124,853 | | | 124,853 | Total principal payments | | $ | 352,000 | | $ | 800,000 | | $ | 517,475 | | $ | 1,669,475 |
| (1) | The term of the line of credit may be extended pursuant to two six-month extension options, subject to certain conditions. |
| (2) | A $127.0 million mortgage note matures in October 2024 and the term may be extended pursuant to a one-year extension option, subject to certain conditions. A $115.0 million mortgage note matures in January 2027 and may be extended pursuant to two one-year extension options, subject to certain conditions. |
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| Schedule of Derivative Instruments |
The following table summarizes the location and fair value of our consolidated derivative instruments on our condensed consolidated balance sheets: | | | | | | | | | | | | | | Number of | | | | | Fair Value | ($ in thousands) | | Contracts | | Notional Amount | | | Other Assets | | Other Liabilities | As of June 30, 2023 | | | | | | | | | | | | Interest rate swaps designated as cash flow hedges | | 12 | | $ | 650,000 | | $ | 20,689 | | $ | — | Interest rate caps designated as cash flow hedges | | 3 | | | 300,000 | | | 16,208 | | | | Interest rate caps not designated as cash flow hedges | | 2 | | | 207,600 | | | 1,789 | | | — | Total derivative instruments | | 17 | | $ | 1,157,600 | | $ | 38,686 | | $ | — | As of December 31, 2022 | | | | | | | | | | | | Interest rate swaps designated as cash flow hedges | | 12 | | $ | 650,000 | | $ | 20,279 | | $ | — | Interest rate caps not designated as cash flow hedges | | 2 | | | 207,600 | | | 4,169 | | | — | Total derivative instruments | | 14 | | $ | 857,600 | | $ | 24,448 | | $ | — |
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| Schedule of Derivative Instruments, Gain (Loss) |
The following table presents the effect of our consolidated derivative instruments on our condensed consolidated financial statements: | | | | | | | | | | | | | | | | For the Three Months Ended | | For the Six Months Ended | | | | June 30, | | June 30, | | (in thousands) | | 2023 | | 2022 | | 2023 | | 2022 | | Derivative instruments designated as cash flow hedges: | | | | | | | | | | | | | | Gain (loss) recognized in AOCI | | $ | 14,146 | | $ | 787 | | $ | 10,146 | | $ | 10,862 | | Amount reclassified from AOCI (out of) into interest expense | | | (4,038) | | | 1,032 | | | (7,094) | | | 2,951 | | Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded | | | 37,882 | | | 33,774 | | | 75,427 | | | 58,184 | | Derivative instruments not designated as cash flow hedges: | | | | | | | | | | | | | | Unrealized (loss) gain on derivative instruments recognized in other income (expenses) (1) | | $ | (1,101) | | $ | 982 | | $ | (2,325) | | $ | 2,532 | | Realized gain on derivative instruments recognized in other income (expenses) (2) | | | 1,293 | | | — | | | 2,414 | | | — | |
| (1) | Unrealized (loss) gain on changes in fair value of derivative instruments relates to mark-to-market changes on our derivatives not designated as cash flow hedges. |
| (2) | Realized gain on derivative instruments relates to interim cash settlements for our derivatives not designated as cash flow hedges. |
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