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Borrowings
9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
Borrowings Borrowings
The following table presents the Company’s mortgage and other notes payable (dollars in thousands):
September 30, 2021 (Unaudited)
December 31, 2020
Recourse vs. Non-RecourseFinal
Maturity
Contractual
Interest Rate(1)
Principal
Amount(2)
Carrying
Value(2)
Principal
Amount
(2)
Carrying
Value
(2)
Mortgage notes payable, net
Watermark Aqua Portfolio
Denver, CONon-recourseRepaid
LIBOR + 2.92%
$— $— $20,189 $20,183 
Frisco, TX(3)
Non-recourseFeb 20263.0%26,000 25,399 18,770 18,764 
Milford, OHNon-recourseSep 2026
LIBOR + 2.68%
18,760 18,472 18,760 18,423 
Rochester Portfolio
Rochester, NYNon-recourseFeb 20254.25%19,164 19,099 19,907 19,830 
Rochester, NY(4)
Non-recourseAug 2027
LIBOR + 2.34%
101,224 100,466 101,224 100,378 
Rochester, NYNon-recourseAug 2022
LIBOR + 2.90%
11,779 11,756 12,800 12,584 
Arbors Portfolio(5)
Various locationsNon-recourseFeb 20253.99%85,847 85,224 87,302 86,521 
Watermark Fountains Portfolio(6)
Various locationsNon-recourseJun 20223.92%379,716 379,253 386,607 385,606 
Various locationsNon-recourseJun 20225.56%72,468 72,348 73,439 73,180 
Winterfell Portfolio(7)
Various locationsNon-recourseJun 20254.17%611,846 599,698 622,045 607,526 
Avamere Portfolio(8)
Various locationsNon-recourseFeb 20274.66%69,544 69,136 70,427 69,962 
Subtotal mortgage notes payable, net$1,396,348 $1,380,851 $1,431,470 $1,412,957 
Other notes payable
Oak Cottage
Santa Barbara, CANon-recourseFeb 20226.00%3,914 3,914 3,914 3,914 
Subtotal other notes payable, net$3,914 $3,914 $3,914 $3,914 
Total mortgage and other notes payable, net$1,400,262 $1,384,765 $1,435,384 $1,416,871 
_______________________________________
(1)Floating-rate borrowings total $131.8 million of principal outstanding and reference one-month LIBOR.
(2)The difference between principal amount and carrying value of mortgage notes payable is attributable to deferred financing costs, net for all borrowings, other than the Winterfell portfolio which is attributable to below market debt intangibles.
(3)In January 2021, the Company refinanced its existing mortgage note payable with a new $26.0 million mortgage note payable. The new mortgage note carries a fixed interest rate of 3.0% through February 2024, followed by the greater of the fixed rate or one-month LIBOR plus 2.80% through the initial maturity date of February 2026.
(4)Composed of seven individual mortgage notes payable secured by seven healthcare real estate properties, cross-collateralized and subject to cross-default.
(5)Composed of four individual mortgage notes payable secured by four healthcare real estate properties, cross-collateralized and subject to cross-default.
(6)Includes $379.7 million principal amount of fixed rate borrowings, secured by 14 healthcare real estate properties, cross-collateralized and subject to cross-default, as well as a supplemental financing totaling $72.5 million of principal, secured by seven healthcare real estate properties, cross-collateralized and subject to cross-default.
(7)Composed of 32 individual mortgage notes payable secured by 32 healthcare real estate properties, cross-collateralized and subject to cross-default.
(8)Composed of five individual mortgage notes payable secured by five healthcare real estate properties, cross-collateralized and subject to cross-default.
The following table presents future scheduled principal payments on mortgage and other notes payable based on final maturity (dollars in thousands):
October 1 to December 31, 2021$6,842 
Years Ending December 31:
2022478,740 
202319,696 
202420,406 
2025670,302 
Thereafter204,276 
Total$1,400,262 
As of September 30, 2021, the operator for the Arbors portfolio failed to remit rent and comply with other contractual terms of its lease agreement, which resulted in a default under the operator’s lease, which in turn, resulted in a non-monetary default under the mortgage notes collateralized by the properties. During the nine months ended September 30, 2021, the Company has remitted contractual debt service and is in compliance with the other contractual terms under the mortgage notes collateralized by the properties.
In response to the operational challenges resulting from the COVID-19 pandemic, the Company entered into forbearance agreements to defer contractual debt service for borrowings on properties within the Aqua, Rochester, Arbors, Winterfell and Watermark Fountains portfolios. The aggregate outstanding principal amount of these borrowings totaled $1.3 billion as of September 30, 2021. The deferred debt service must be repaid following the forbearance period with no additional interest or penalties incurred by the Company, subject to satisfaction of certain conditions. The deferral of payments ended during the year ended December 31, 2020 and the Company has resumed remitting debt service, together with the deferred debt service, on these mortgage notes payable. As of September 30, 2021, borrowings on properties within the Rochester and Watermark Fountains portfolios have deferred debt service outstanding. These borrowings remain in technical default and are subject to the terms of the forbearance agreements until all deferred debt service is repaid. Deferred debt service, which totaled $1.3 million as of September 30, 2021, is scheduled to be repaid in full for all borrowings by January 2022.
In addition, the forbearance agreement for a mortgage note payable on a property within the Rochester portfolio temporarily waived financial covenants under the mortgage note through December 31, 2020. As of September 30, 2021, the property did not satisfy the financial covenants under the mortgage note, which have been waived by the lender. As of September 30, 2021, the mortgage note payable had an outstanding principal balance of $19.2 million that matures in February 2025.
Line of Credit - Related Party
The following table presents the Company’s borrowings under the Sponsor line of credit as of September 30, 2021 (dollars in thousands):
Principal Amount
Asset Type:
September 30, 2021 (Unaudited)
December 31, 2020CapacityContractual Interest RateMaturity Date
Sponsor Line of Credit
$— $35,000 $35,000 
LIBOR + 3.50%
Jun 2023
In October 2017, the Company obtained a revolving line of credit from an affiliate of DigitalBridge (the “Sponsor Line”). As of September 30, 2021, the Sponsor Line has a borrowing capacity of $35.0 million at an interest rate of 3.5% plus LIBOR. In June 2021, the maturity date was extended through June 2023.
In April 2020, the Company borrowed $35.0 million under the Sponsor Line to improve its liquidity position as a result of the COVID-19 pandemic. In July 2021, the Company repaid in full the outstanding borrowings. For the three months ended September 30, 2021 and 2020, interest expense on the Company’s consolidated statements of operations includes Sponsor Line interest of $0.1 million and $0.3 million, respectively. For the nine months ended September 30, 2021 and 2020, Sponsor Line interest totaled $0.7 million and $0.6 million, respectively.