Notes Payable, net (Tables)

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Schedule of long-term debt instruments

The following table sets forth information with respect to our outstanding indebtedness:

	March 31, 2018			December 31, 2017			Interest Rate(1)	Contractual Maturity Date
UNSECURED NOTES PAYABLE
Unsecured Revolving Credit Facility(2)(3)	$	20,000		$	100,000		LIBOR + 1.05% to 1.50%	3/13/2022	(4)
Term Loan A(2)(5)	300,000			300,000			LIBOR + 1.20% to 1.70%	4/1/2020	(6)
Term Loan C(2)	75,000			75,000			LIBOR + 1.30% to 2.20%	11/17/2020
Term Loan B(2)(7)	350,000			350,000			LIBOR + 1.20% to 1.70%	4/1/2022
Term Loan D(2)(8)	125,000			125,000			LIBOR + 1.20% to 1.70%	11/17/2022
Series A Notes	110,000			110,000			4.34%	1/2/2023
Series E Notes	50,000			50,000			3.66%	9/15/2023
Series B Notes	259,000			259,000			4.69%	12/16/2025
Series D Notes	150,000			150,000			3.98%	7/6/2026
Registered Senior Notes(9)	400,000			400,000			3.95%	11/1/2027
Series C Notes	56,000			56,000			4.79%	12/16/2027
TOTAL UNSECURED NOTES PAYABLE	1,895,000			1,975,000
SECURED NOTES PAYABLE
Sunset Gower Studios/Sunset Bronson Studios(10)	5,001			5,001			LIBOR + 2.25%	3/4/2019	(4)
Met Park North(11)	64,500			64,500			LIBOR + 1.55%	8/1/2020
10950 Washington(12)	27,281			27,418			5.32%	3/11/2022
Element LA	168,000			168,000			4.59%	11/6/2025
Hill7(13)	101,000			101,000			3.38%	11/6/2028
Rincon Center	—			98,392			5.13%	N/A
TOTAL SECURED NOTES PAYABLE	365,782			464,311
TOTAL NOTES PAYABLE	2,260,782			2,439,311
Unamortized deferred financing costs and loan discounts(14)	(20,094		)	(17,931		)
TOTAL NOTES PAYABLE, NET	$	2,240,688		$	2,421,380

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(1) Interest rate with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed. Interest rates are as of March 31, 2018, which may be different than the interest rates as of December 31, 2017 for corresponding indebtedness.

(2) The Company has an option to make an irrevocable election to change the interest rate depending on the Company’s credit rating or a specified base rate plus an applicable margin. As of March 31, 2018, no such election had been made.

(3) The Company has a total capacity of $600.0 million under its unsecured revolving credit facility.

(4) The maturity date may be extended once for an additional one-year term.

(5) The outstanding balance of the term loan was effectively fixed at 2.56% to 3.06% per annum through the use of two interest rate swaps. See Note 9 for details.

(6) The maturity date may be extended twice, each time for an additional one-year term.

(7) The outstanding balance of the term loan was effectively fixed at 2.96% to 3.46% per annum through the use of two interest rate swaps. See Note 9 for details.

(8) The outstanding balance of the term loan was effectively fixed at 2.63% to 3.13% per annum through the use of an interest rate swap. See Note 9 for details.

(9) On October 2, 2017, the Company completed an underwritten public offering of $400.0 million of senior notes, which were issued at 99.815% of par.

(10) The Company has the ability to draw up to $257.0 million under its construction loan, subject to lender required submissions.

(11) This loan bears interest only. Interest on the full loan amount has been effectively fixed at 3.71% per annum through the use of an interest rate swap. See Note 9 for details.

(12) Monthly debt service includes annual debt amortization payments based on a 30-year amortization schedule with a balloon payment at maturity.

(13) The Company owns 55% of the ownership interest in the consolidated joint venture that owns the Hill7 property. The full amount of the loan is shown. This loan bears interest only at 3.38% until November 6, 2026, at which time the interest rate will increase and monthly debt service will include principal payments with a balloon payment at maturity.

(14) Excludes deferred financing costs related to establishing the Company’s unsecured revolving credit facility.

Schedule of maturities of long-term debt

The following table summarizes the minimum future principal payments due (before the impact of extension options, if applicable) on the operating partnership’s secured and unsecured notes payable as of March 31, 2018:

Year	Annual Principal Payments
Remaining 2018	$	400
2019	5,569
2020	440,095
2021	632
2022	520,086
Thereafter	1,294,000
Total	$	2,260,782

Summary of balance and key terms of the unsecured revolving credit facility

The following table summarizes the balance and key terms of the unsecured revolving credit facility as of:

	March 31, 2018		December 31, 2017
Outstanding borrowings	$	20,000	$	100,000
Remaining borrowing capacity	580,000		300,000
Total borrowing capacity	$	600,000	$	400,000
Interest rate(1)(2)	LIBOR + 1.05% to 1.50%		LIBOR + 1.15% to 1.85%
Facility fee-annual rate(1)	0.15% or 0.30%		0.20% or 0.35%
Contractual maturity date(3)	3/13/2022		4/1/2019

_________________

(1) The rate is based on the operating partnership’s leverage ratio. The Company has the option to make an irrevocable election to change the interest rate depending on the Company’s credit rating. As of March 31, 2018, no such election had been made.

(2) The Company has the option to make an irrevocable election to change the interest rate depending on the Company’s specified base rate plus an applicable margin. As of March 31, 2018, no such election had been made.

(3) The maturity date may be extended once for an additional one-year term.

Summary of existing covenants and their covenant levels

The following table summarizes existing covenants and their covenant levels related to our unsecured revolving credit facility, term loans, and series A, B, D, and E notes, when considering the most restrictive terms:

Covenant Ratio	Covenant Level
Total Liabilities to Total Asset Value	≤ 60%
Unsecured Indebtedness to Unencumbered Asset Value	≤ 60%
Adjusted EBITDA to Fixed Charges	≥ 1.5x
Secured Indebtedness to Total Asset Value	≤ 45%
Unencumbered NOI to Unsecured Interest Expense	≥ 2.0x

The following table summarizes existing covenants and their covenant levels related to our registered senior notes:

Covenant Ratio	Covenant Level
Debt to Total Assets	≤ 60%
Total Unencumbered Assets to Unsecured Debt	≥ 150%
Consolidated Income Available for Debt Service to Annual Debt Service Charge	≥ 1.5x
Secured Debt to Total Assets	≤ 45%

Schedule of interest costs incurred

The following table represents a reconciliation from the gross interest expense to the amount on the interest expense line item in the Consolidated Statements of Operations:

	Three Months Ended March 31,
	2018			2017
Gross interest expense(1)	$	22,431		$	23,190
Capitalized interest	(3,586		)	(2,446		)
Amortization of deferred financing costs and loan discount, net	1,658			1,186
Interest expense	$	20,503		$	21,930

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(1) Includes interest on the Company’s notes payable and hedging activities.