Debt

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Debt

Debt

The following table sets forth information with respect to the Company’s outstanding indebtedness:

	March 31, 2024		December 31, 2023		Interest Rate(1)	Contractual Maturity Date(2)
UNSECURED AND SECURED DEBT
Unsecured debt
Unsecured revolving credit facility(3)(4)	$	280,000	$	192,000	SOFR + 1.15% to 1.60%	12/21/2026	(5)
Series B notes	259,000		259,000		4.69%	12/16/2025
Series C notes	56,000		56,000		4.79%	12/16/2027
Series D notes	150,000		150,000		3.98%	7/6/2026
3.95% Registered senior notes	400,000		400,000		3.95%	11/1/2027
4.65% Registered senior notes	500,000		500,000		4.65%	4/1/2029
3.25% Registered senior notes	400,000		400,000		3.25%	1/15/2030
5.95% Registered senior notes(6)	350,000		350,000		5.95%	2/15/2028
Total unsecured debt	2,395,000		2,307,000
Secured debt
Hollywood Media Portfolio	$	1,100,000	$	1,100,000	SOFR + 1.10%	8/9/2026	(7)
Acquired Hollywood Media Portfolio debt	(30,233)		(30,233)		SOFR + 2.11%	8/9/2026	(7)
Hollywood Media Portfolio, net(8)(9)	1,069,767		1,069,767
Element LA	168,000		168,000		4.59%	11/6/2025
1918 Eighth(10)	314,300		314,300		SOFR + 1.40%	12/18/2025
Hill7(11)	101,000		101,000		3.38%	11/6/2028
Total secured debt	1,653,067		1,653,067
Total unsecured and secured debt	4,048,067		3,960,067
Unamortized deferred financing costs/loan discounts(12)	(13,767)		(14,753)
TOTAL UNSECURED AND SECURED DEBT, NET	$	4,034,300	$	3,945,314
JOINT VENTURE PARTNER DEBT(13)	$	66,136	$	66,136	4.50%	10/9/2032	(14)

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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, 2024, which may be different than the interest rates as of December 31, 2023 for corresponding indebtedness.

2.Maturity dates include the effect of extension options.

3.The annual facility fee rate ranges from 0.15% or 0.30% based on the operating partnership’s leverage ratio. 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, 2024, no such election had been made and the unsecured revolving credit facility bore interest at SOFR + 1.35%.

4.The Company has a total capacity of $900.0 million available under its unsecured revolving credit facility, up to $225.0 million of which can be used for borrowings in pounds sterling or Canadian dollars. Subject to the satisfaction of certain conditions and lender commitments, the operating partnership may increase the commitments held under the Amended and Restated Credit Agreement up to a total of $2.0 billion either in the form of an increase to an existing unsecured revolving credit facility or a new loan, including a term loan.

5.Includes the option to extend the initial maturity date of December 21, 2025 twice for an additional six-month term each.

6.An amount equal to the net proceeds from the 5.95% registered senior notes has been allocated to new or existing eligible green projects.

7.Includes the option to extend the initial maturity date of August 9, 2023 three times for an additional one-year term each. The first extension option was executed as of August 9, 2023.

8.The Company purchased bonds comprising the loan in the amount of $30.2 million.

9.The floating interest rate on $539.0 million of principal has been capped at 5.70% through the use of an interest rate cap. The floating interest rate on $531.2 million of principal is effectively fixed at 3.31% through the use of an interest rate swap. The floating interest rate on $180.0 million of principal is effectively fixed at 4.13% through the use of an interest rate swap.

10.This loan is interest-only through its term. The floating interest rate on $141.4 million of principal has been capped at 5.00% through the use of an interest rate cap. The floating interest rate on the remaining $172.9 million of principal has been effectively fixed at 3.75% through the use of an interest rate swap.

11.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.

12.Excludes deferred financing costs related to the Company’s unsecured revolving credit facility, which are reflected in prepaid expenses and other assets, net on the Consolidated Balance Sheets. See Note 8 for details.

13.This amount relates to debt attributable to Allianz U.S. Private REIT LP (“Allianz”), the Company’s partner in the joint venture that owns the Ferry Building property.

14.Includes the option to extend the initial maturity date of October 9, 2028 twice for an additional two-year term each.

Current Year Activity

During the three months ended March 31, 2024, there were $88.0 million of borrowings on the unsecured revolving credit facility, net of repayments. The Company generally uses the unsecured revolving credit facility to finance the acquisition of properties and businesses, to provide funds for tenant improvements and capital expenditures and to provide for working capital and other corporate purposes.

Indebtedness

The Company presents its financial statements on a consolidated basis. Notwithstanding such presentation, except to the extent expressly indicated, the Company’s separate property-owning subsidiaries are not obligors of or under the debt of their respective affiliates and each property-owning subsidiary’s separate liabilities do not constitute obligations of its respective affiliates.

Loan agreements include events of default that the Company believes are usual for loans and transactions of this type. As of the date of this filing, there have been no events of default associated with the Company’s loans.

The following table provides information regarding the Company’s future minimum principal payments due on the Company’s debt (after the impact of extension options, if applicable) as of March 31, 2024:

Year	Unsecured and Secured Debt		Joint Venture Partner Debt
Remaining 2024	$	—	$	—
2025	741,300		—
2026	1,499,767		—
2027	456,000		—
2028	451,000		—
Thereafter	900,000		66,136
TOTAL	$	4,048,067	$	66,136

Debt Covenants

The operating partnership’s ability to borrow under its unsecured loan arrangements remains subject to ongoing compliance with financial and other covenants as defined in the respective agreements. Certain financial covenant ratios are subject to change in the occurrence of material acquisitions as defined in the respective agreements. Other covenants include certain limitations on dividend payouts and distributions, limits on certain types of investments outside of the operating partnership’s primary business and other customary affirmative and negative covenants.

The following table summarizes existing covenants and their covenant levels as of March 31, 2024 related to our unsecured revolving credit facility and term loans:

Covenant Ratio	Covenant Level	Actual Performance
Total liabilities to total asset value	≤ 65%	47.1%
Unsecured indebtedness to unencumbered asset value	≤ 65%	40.7%
Adjusted EBITDA to fixed charges	≥ 1.5x	1.8x
Secured indebtedness to total asset value	≤ 45%	20.3%
Unencumbered NOI to unsecured interest expense	≥ 2.0x	2.6x

The following table summarizes existing covenants and their covenant levels as of March 31, 2024 related to our private placement notes:

Covenant Ratio(1)	Covenant Level	Actual Performance
Total liabilities to total asset value	≤ 65%	50.8%
Unsecured indebtedness to unencumbered asset value	≤ 65%	49.7%
Adjusted EBITDA to fixed charges	≥ 1.5x	1.8x
Secured indebtedness to total asset value	≤ 45%	21.9%
Unencumbered NOI to unsecured interest expense	≥ 2.0x	2.6x

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1.The covenant and actual performance metrics above represent terms and definitions reflected in the indentures governing the Series B, Series C and Series D notes.

The following table summarizes existing covenants and their covenant levels related to the registered senior notes as of March 31, 2024:

Covenant Ratio(1)	Covenant Level	Actual Performance
Debt to total assets	≤ 60%	44.3%
Total unencumbered assets to unsecured debt	≥ 150%	239.3%
Consolidated income available for debt service to annual debt service charge	≥ 1.5x	1.8x
Secured debt to total assets	≤ 45%	19.0%

_________________

1.The covenant and actual performance metrics above represent terms and definitions reflected in the indentures governing the 3.25% Senior Notes, 3.95% Senior Notes, 4.65% Senior Notes and 5.95% Senior Notes.

The operating partnership was in compliance with its financial covenants as of March 31, 2024.

Repayment Guarantees

Although the rest of the operating partnership’s loans are secured and non-recourse, the operating partnership provides limited customary secured debt guarantees for items such as voluntary bankruptcy, fraud, misapplication of payments and environmental liabilities.

The Company and certain of its subsidiaries guarantee the operating partnership’s unsecured debt. The likelihood of loss relating to this guarantee is remote as of March 31, 2024.

Interest Expense

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

	Three Months Ended March 31,
	2024		2023
Gross interest expense(1)	$	50,656	$	53,298
Capitalized interest	(8,482)		(6,862)
Non-cash interest expense(2)	1,915		7,371
INTEREST EXPENSE	$	44,089	$	53,807

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1.Includes interest on the Company’s debt and hedging activities.

2.Includes the amortization of deferred financing costs and fair market value adjustments for our mark-to-market interest rate derivatives.