Debt |
On January 5, 2023, the Company transitioned the borrowing rate of its unsecured credit facility (the “Unsecured Credit Facility”) and $50 million term loan from LIBOR to daily-simple SOFR. The Company applied the practical expedients available under the reference rate reform guidance and accounted for the modifications as continuations of the existing The following table summarizes the outstanding indebtedness as of December 31, 2023 and 2022 (dollars in thousands), including the impact of the effective interest rate swaps described in Note 7:
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Interest Rate as of December 31, 2023 |
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Unsecured Credit Facility (2)(4) |
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$ |
200,000 |
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$ |
200,500 |
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SOFR +1.50 |
% (1)(2) |
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November 2025 |
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50,000 |
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50,000 |
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SOFR +1.35 |
% (1)(3) |
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September 2024 |
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25,000 |
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— |
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6.00 |
% (4) |
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January 2026 |
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Mission City |
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45,994 |
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46,859 |
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3.78 |
% |
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November 2027 |
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38,932 |
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39,673 |
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4.30 |
% |
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March 2027 |
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38,789 |
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39,440 |
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4.49 |
% |
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September 2028 |
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31,501 |
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32,140 |
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4.56 |
% |
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March 2027 |
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30,682 |
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31,297 |
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4.65 |
% |
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October 2025 |
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30,600 |
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30,600 |
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4.20 |
% |
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September 2028 |
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27,000 |
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27,000 |
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4.24 |
% |
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April 2027 |
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26,139 |
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26,784 |
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7.05 |
% (7) |
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August 2028 |
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20,856 |
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21,396 |
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3.15 |
% |
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December 2025 |
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20,752 |
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21,192 |
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4.55 |
% |
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May 2024 |
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5090 N. 40th St |
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20,370 |
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20,810 |
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3.92 |
% |
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January 2027 |
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20,000 |
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20,000 |
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3.69 |
% |
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May 2027 |
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15,860 |
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16,165 |
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4.44 |
% |
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December 2024 |
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15,826 |
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16,273 |
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3.15 |
% |
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June 2024 |
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14,419 |
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14,773 |
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7.05 |
% (7) |
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August 2028 |
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— |
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38,894 |
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— |
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— |
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672,720 |
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693,796 |
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Deferred financing costs, net |
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(3,258 |
) |
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(3,887 |
) |
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Unamortized fair value adjustments |
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48 |
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190 |
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$ |
669,510 |
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$ |
690,099 |
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(1) |
As of December 31, 2023, the daily-simple SOFR rate was 5.38%. |
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(2) |
Borrowings under the Unsecured Credit Facility bear interest at a rate equal to the daily-simple SOFR rate plus a margin of between 135 to 235 basis points depending upon the Company’s consolidated leverage ratio. On February 9, 2023, the Company entered into a three-year interest rate swap for a notional amount of $140 million, effective March 8, 2023, effectively fixing the SOFR |
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component of the borrowing rate for $140 million of the Unsecured Credit Facility at 4.19%. As of December 31, 2023, the Unsecured Credit Facility had $200.0 million drawn and a $4.2 million letter of credit to satisfy escrow requirements for a mortgage lender. The Unsecured Credit Facility matures in November 2025 and may be extended 12 months at the Company’s option upon meeting certain conditions. The Unsecured Credit Facility requires the Company to maintain a fixed charge coverage ratio of no less than 1.50x. |
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(3) |
Borrowings under the $50 million term loan bear interest at a rate equal to the daily-simple SOFR rate plus a margin of between 135 to 225 basis points depending upon the Company’s consolidated leverage ratio. The SOFR component of the borrowing rate is effectively fixed for the remainder of the five-year term by a $50 million interest rate swap at 1.17%. |
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(4) |
On January 5, 2023, the Company entered into a second amendment to its amended and restated credit agreement, dated November 16, 2021 for the Unsecured Credit Facility and entered into a three-year $ 25 million term loan, increasing its total authorized borrowings from $ 350 million to $ 375 million. Borrowings under the $ 25 million term loan bear interest at a rate equal to the daily-simple SOFR rate plus a margin of 210 basis points. In conjunction with the term loan, the Company also entered into a three-year interest rate swap for a notional amount of $ 25 million, effectively fixing the SOFR component of the borrowing rate of the term loan at 3.90 %. |
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(5) |
The mortgage loan anticipated repayment date (“ARD”) is March 1, 2027. The final scheduled maturity date can be extended up to 5 years beyond the ARD. If the loan is not paid off at ARD, the loan’s interest rate shall be adjusted to the greater of (i) the initial interest rate plus 200 basis points or (ii) the yield on the five year “on the run” treasury reported by Bloomberg market data service plus 450 basis points. |
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(6) |
In the second quarter of 2023, the Debt Service Coverage Ratio (“DSCR”) and debt yield covenants for SanTan were not met, which triggered a ‘cash-sweep period’ that began in the second quarter of 2023. As of December 31, 2023, the DSCR and debt yield covenants were still not met. As of December 31, 2023, total restricted cash for the property was $4.1 million. |
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(7) |
On August 16, 2023, the Company entered into two amended and restated loan agreements for FRP Collection and Carillon Point, which among other things, extended the term for an additional five years and amended the interest rates from fixed to floating. The loans bear interest at a rate equal to the daily-simple SOFR rate plus a margin of 275 basis points. In conjunction with the amended and restated loan agreements, the Company also entered into two five-year interest rate swap agreements, effectively fixing the SOFR component of the borrowing rate of the loans at 4.30%. |
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(8) |
In the first quarter of 2023, a ‘cash-sweep period’ began for the Cascade Station loan due to the non-renewal of a major tenant’s leased space in the building. As of December 31, 2023, total restricted cash for the property was $2.0 million. |
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(9) |
In the third quarter of 2022, the DSCR covenant for FRP Ingenuity Drive was not met, which triggered a ‘cash-sweep period’ that began in the fourth quarter of 2022. As of December 31, 2023, the DSCR was still not met. As of December 31, 2023 and December 31, 2022, total restricted cash for the property was $3.2 million and $2.6 million, respectively. |
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(10) |
In the second quarter of 2023, the non-recourse debt associated with the 190 Office Center property was deconsolidated as a result of the appointment of a receiver to assume possession and control of the property. The loan balance as of the date of deconsolidation was $38.6 million. | The scheduled principal repayments of mortgage payable as of December 31, 2023 are as follows (in thousands):
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$ |
107,675 |
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254,697 |
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29,563 |
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176,477 |
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104,308 |
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— |
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$ |
672,720 |
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