Debt Obligations |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Obligations | Debt Obligations Debt obligations consist of the following (dollars in thousands):
__________________________________________ (1) Excludes $409 and $289 of deferred financing costs related to the credit facility which are reflected in other assets at September 30, 2024 and December 31, 2023 respectively. Mortgages Payable On August 22, 2024, we obtained a $27,375,000 mortgage on our Woodland Trails - LA Grange, GA property. The debt bears a fixed rate of interest of 5.22%, is interest only until maturity and matures in September 2031. At September 30, 2024, the weighted average interest rate on the Company's mortgage payables was 4.09% and the weighted average remaining term to maturity is 6.3 years. For the three months ended September 30, 2024 and 2023, interest expense, which includes amortization of deferred financing costs, was $4,886,000 and $4,774,000, respectively. For the nine months ended September 30, 2024 and 2023, interest expense, which includes amortization of deferred financing costs, was $14,271,000 and $14,063,000, respectively. .Credit Facility On July 9, 2024, the Company's credit facility, with an affiliate of Valley National Bank ("VNB"), was amended to, among other things, reduce the borrowing capacity from $60,000,000 to $40,000,000, extend the facility's maturity from September 2025 to September 2027 and revise certain financial and other covenants. The facility allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $40,000,000. The facility can be used to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi-family properties and for operating expenses (i.e., working capital (including dividend payments)); provided that no more than $25,000,000 may be used for operating expenses. The facility is secured by the cash available at VNB and the Company's pledge of the interests in the entities that own the properties, and matures in September 2027. The interest rate on the credit facility, which adjusts monthly and is subject to a floor of 6.0%, equals one-month term plus 250 basis points. The interest rate in effect as of September 30, 2024 is 7.70%. There is an unused facility fee of 0.25% per annum on the total amount committed by VNB and unused by the Company. At September 30, 2024, the Company is in compliance in all material respects with its obligations under the facility. At September 30, 2024 and December 31, 2023, there was no outstanding balance on the facility and at each such date, the full amount was available to be borrowed. Interest expense for the three months ended September 30, 2024 and 2023, which includes amortization of deferred financing costs and unused fees was $134,000 and $91,000, respectively. Interest expense for the nine months ended September 30, 2024 and 2023, which includes amortization of deferred financing costs and unused fees was $318,000 and $482,000, respectively. The remaining deferred financing costs of $409,000 and $289,000, are recorded as Other Assets on the Consolidated balance sheets at September 30, 2024 and December 31, 2023, respectively. Junior Subordinated Notes At September 30, 2024 and December 31, 2023, the outstanding principal balance of the Company's junior subordinated notes was $37,400,000, before deferred financing costs of $242,000 and $257,000, respectively. The interest rate on outstanding balance resets quarterly and is equal to three month term + 2.26%. The interest rate in effect at September 30, 2024 and 2023 was 7.52% and 7.63%, respectively. The junior subordinated notes require interest only payments through the maturity date of April 30, 2036, at which time repayment of the outstanding principal and unpaid interest become due. Interest expense for the three months ended September 30, 2024 and 2023, which includes amortization of deferred financing costs, was $725,000 and $716,000, respectively. Interest expense for the nine months ended September 30, 2024 and 2023, which includes amortization of deferred financing costs, was $2,179,000 and $2,032,000, respectively.
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