Note 4 — Mortgage Notes Payable, Net

The following table reflects the Company's mortgage notes payable as of December 31, 2017 and 2016:



Portfolio	Encumbered Properties ⁽¹⁾	Outstanding Loan Amount as of December 31,						Effective Interest Rate			Interest Rate		Maturity
Portfolio	Encumbered Properties ⁽¹⁾	2017			2016			Effective Interest Rate			Interest Rate		Maturity
		(In thousands)			(In thousands)
Medical Center of New Windsor - New Windsor, NY	—	$	—		$	8,602		—	%		Fixed		Sep. 2017
Plank Medical Center - Clifton Park, NY	—	—			3,414			—	%		Fixed		Sep. 2017
Countryside Medical Arts - Safety Harbor, FL	1	5,773			5,904			4.98	%		Variable	⁽²⁾	Apr. 2019
St. Andrews Medical Park - Venice, FL	3	6,381			6,526			4.98	%		Variable	⁽²⁾	Apr. 2019
Slingerlands Crossing Phase I - Bethlehem, NY	—	—			6,589			—	%		Fixed		Sep. 2017
Slingerlands Crossing Phase II - Bethlehem, NY	—	—			7,671			—	%		Fixed		Sep. 2017
Benedictine Cancer Center - Kingston, NY	—	—			6,719			—	%		Fixed		Sep. 2017
Aurora Healthcare Center Portfolio - WI	—	—			30,858			—	%		Fixed		Jan. 2018
Palm Valley Medical Plaza - Goodyear, AZ	1	3,327			3,428			4.15	%		Fixed		Jun. 2023
Medical Center V - Peoria, AZ	1	3,066			3,151			4.75	%		Fixed		Sep. 2023
Courtyard Fountains - Gresham, OR	1	24,372			24,820			3.87	%		Fixed	⁽³⁾	Jan. 2020
Fox Ridge Bryant - Bryant, AR	1	7,565			7,698			3.98	%		Fixed		May 2047
Fox Ridge Chenal - Little Rock, AR	1	17,270			17,540			3.98	%		Fixed		May 2049
Fox Ridge North Little Rock - North Little Rock, AR	1	10,716			10,884			3.98	%		Fixed		May 2049
Philip Professional Center - Lawrenceville, GA	2	4,895			—			4.00	%		Fixed		Oct. 2019
MOB Loan	32	250,000			—			4.44	%		Fixed	⁽⁵⁾	June 2022
Bridge Loan	23	82,000			—			4.13	%		Variable		Dec. 2019
Gross mortgage notes payable	67	415,365			143,804			4.31	%	⁽⁴⁾
Deferred financing costs, net of accumulated amortization		(7,625		)	(1,516		)
Mortgage premiums and discounts, net		(1,110		)	466
Mortgage notes payable, net		$	406,630		$	142,754

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(1) Does not include eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility. The equity interests and related rights in our wholly owned subsidiaries that directly own or lease these real estate assets have been pledged for the benefit of the lenders thereunder. See Note 5 — Credit Facilities.

(2) Fixed interest rate through May 10, 2017. Interest rate changes to variable rate starting in June 2017.

(3) Interest only payments through July 1, 2016. Principal and interest payments began in August 2016.

(4) Calculated on a weighted average basis for all mortgages outstanding as of December 31, 2017.

(5) Variable rate loan which is fixed as a result of entering into interest rate swap agreements. Note 7 — Derivatives and Hedging Activities.

As of December 31, 2017, the Company had pledged $912.9 million in real estate as collateral for these mortgage notes payable. This real estate is not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable on the properties. Except as noted above, the Company makes payments of principal and interest on all of its mortgage notes payable on a monthly basis.

Some of the Company's mortgage note agreements require the compliance with certain property-level financial covenants including debt service coverage ratios. As of December 31, 2017, the Company was in compliance with the financial covenants under its mortgage note agreements.

MOB Loan

On June 30, 2017, Capital One, National Association ("Capital One, NA"), as administrative agent and lender, and certain other lenders (collectively, the "MOB Lenders"), made a loan in the aggregate amount of $250.0 million (the “MOB Loan”) to certain subsidiaries of the OP. In connection with the MOB Loan, the OP entered into a Guaranty of Recourse Obligations (the “Guaranty”) and a Hazardous Materials Indemnity Agreement (the “Environmental Indemnity”) in favor of Capital One, NA and the MOB Lenders. Pursuant to the Guaranty, the OP has guaranteed, among other things, specified losses arising from certain actions of any of the OP's subsidiaries, including fraud, willful misrepresentation, certain intentional acts, misapplication of funds, physical waste, and failure to pay taxes. The Guaranty requires the Company to maintain a certain minimum of shareholders’ equity on its balance sheet. Pursuant to the Environmental Indemnity, the OP and the Company's subsidiaries that directly own or lease the mortgaged properties have indemnified the MOB Lenders against losses, costs or liabilities related to certain environmental matters.

The MOB Loan bears interest at a variable rate equal to LIBOR plus 2.5% and requires the Company to pay interest on a monthly basis with the principal balance due on the maturity date of June 30, 2022. In connection with the closing of the MOB Loan, the OP executed two interest rate swaps on the full amount of the MOB Loan, fixing the interest rate exposure at 4.38%. See Note 7 — Derivatives and Hedging Activities for additional information on the Company's outstanding derivatives.

The Company may pre-pay the MOB Loan, in whole or in part, at any time, with payment of a prepayment premium equal to (a) 2.0% of principal outstanding if prepayment is made during the first 12 months of the MOB Loan and (b) 1.0% of principal outstanding if prepayment is made during the second 12 months of the MOB Loan. Thereafter, no prepayment premium is applicable.

Bridge Loan

On December 28, 2017, 23 wholly owned subsidiaries (the “Borrowers”) of the OP entered into a loan agreement (the “Loan Agreement”) with Capital One, National Association (“Capital One”), as administrative agent and lender.

The Loan Agreement provides for a $82 million loan (the “Loan”) with a floating interest rate equal to one-month LIBOR plus 2.5% per annum and a maturity date of December 28, 2019. Subject to meeting certain conditions, including a minimum debt yield and debt service coverage ratio, the Borrowers have the right to extend the maturity date for one year.

The Loan may be prepaid at any time in whole or in part, subject to certain conditions and limitations. Upon repayment of all or any part of the principal of the Loan, whether as a prepayment or as a repayment at maturity, the Borrowers are obligated to pay to an exit fee of: (i) 2.0% of the principal amount with respect to the aggregate of approximately $63.0 million principal amount allocated under the Loan to the seven mortgaged properties that have been identified for refinancing through Fannie Mae or Freddie Mac, and (ii) 1.0% of the principal amount with respect to the aggregate of approximately $19 million principal amount allocated under the Loan to the other sixteen mortgaged properties. No exit fee will be due or payable: (i) with respect to any portion of the Loan refinanced through Fannie Mae’s Multifamily MBS program with Capital One or one of its affiliates acting as agent, originator or seller, (ii) with respect to any portion of the Loan that is not refinanced through Fannie Mae’s Multifamily MBS program due to the program no longer being available under applicable law or because the applicable mortgaged property being refinanced does not qualify for financing through the program, or (iii) with respect to any prepayment in connection with a casualty or a condemnation.

At the closing of the Loan, the net proceeds were primarily used to repay $35.0 million outstanding under the Company’s senior secured revolving credit facility (the “Revolver”) related to 12 of the mortgaged properties that had been included in the pool of eligible unencumbered real estate assets comprising the borrowing base under the Revolver, with the balance available for general corporate purposes.

Future Principal Payments

The following table summarizes the scheduled aggregate principal payments on mortgage notes payable for the five years subsequent to December 31, 2017:



(In thousands)	Future Principal Payments
2018	$	83,534
2019	18,078
2020	24,278
2021	892
2022	250,928
Thereafter	37,655
Total	$	415,365