Mortgages, Notes and Loans Payable, Net (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Summary and activity for mortgages, notes and loans payable

Mortgages, notes and loans payable, net are summarized as follows: 

thousands	March 31, 2022		December 31, 2021
Fixed-rate debt
Unsecured 5.375% Senior Notes due 2028	$	750,000	$	750,000
Unsecured 4.125% Senior Notes due 2029	650,000		650,000
Unsecured 4.375% Senior Notes due 2031	650,000		650,000
Secured mortgages, notes and loans payable	1,079,132		1,006,428
Special Improvement District bonds	68,590		69,131
Variable-rate debt (a)
Secured Bridgeland Notes due 2026	275,000		275,000
Mortgages, notes and loans payable	1,249,830		1,238,857
Unamortized deferred financing costs (b)	(47,602)		(48,259)
Total mortgages, notes and loans payable, net	$	4,674,950	$	4,591,157

(a)The Company has entered into derivative instruments to manage a portion of the variable interest rate exposure. See Note 8 - Derivative Instruments and Hedging Activities for additional information.

(b)Deferred financing costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method (or other methods which approximate the effective interest method).

The Company’s borrowing activity is summarized as follows: 

thousands	Initial / Extended Maturity (a)	Interest Rate			Carrying Value
Balance at December 31, 2021					$	4,591,157
Borrowings:
Two Summerlin	February 2027 / February 2029	3.43	%	(b)	40,800
One Merriweather	February 2032	3.53	%	(c)	49,800
Two Merriweather	February 2032	3.83	%	(d)	25,600
Draws on existing mortgages, notes and loans payable					58,875
Repayments:
Senior Secured Credit Facility	September 2023	4.61	%	(c)	(74,482)
Repayments on existing mortgages, notes and loans payable					(17,457)
Other:
Deferred financing costs, net					657
Balance at March 31, 2022					$	4,674,950

(a)Maturity dates presented represent initial maturity dates and the extended or final maturity dates as contractually stated. HHC has the option to exercise extension periods at the initial maturity date, subject to certain terms which may include minimum debt service coverage, minimum occupancy levels or condominium sales levels, as applicable and other performance criteria. In certain cases, due to property performance not meeting covenants, HHC may have to pay down a portion of the loan to obtain the extension.

(b)In February 2022, the Company closed on a $40.8 million non-recourse financing of Two Summerlin which was previously unencumbered. The loan bears interest at Secured Overnight Financing Rate (SOFR) plus 1.75% with an initial maturity of February 2027 and two one-year extension options. Concurrent with the funding of the loan, the Company entered into an interest rate swap agreement with a notional amount equal to the principal amount of the loan and an interest rate of 3.425%.

(c)In January 2022, the Company closed on a $49.8 million non-recourse, interest-only financing of One Merriweather. The loan bears interest at 3.525% with maturity in February 2032. Proceeds from this financing were used to repay a portion of the Senior Secured Credit Facility.

(d)In January 2022, the Company closed on a $25.6 million non-recourse, interest-only financing of Two Merriweather which was previously unencumbered. The loan bears interest at 3.825% with maturity in February 2032.