DEBT

6 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

DEBT

NOTE 5 – DEBT

For the three months ended March 31, 2020 and 2019, amortization of financing costs included in interest expense was $322,000 and $320,000, respectively. For the six months ended March 31, 2020 and 2019, amortization of financing costs included in interest expense was $758,000 and $637,000, respectively.

As of March 31, 2020, we owned 116 properties, of which 59 carried Fixed Rate Mortgage Notes Payable with outstanding principal balances totaling $787.6 million. The following is a summary of our Fixed Rate Mortgage Notes Payable as of March 31, 2020 and September 30, 2019 (in thousands):

	3/31/2020				9/30/2019
	Amount		Weighted Average Interest Rate (1)		Amount		Weighted Average Interest Rate (1)
Fixed Rate Mortgage Notes Payable	$	787,625		4.04%	$	752,916		4.03%
Debt Issuance Costs	$	11,935			$	11,733
Accumulated Amortization of Debt Issuance Costs		(4,052)				(3,745)
Unamortized Debt Issuance Costs	$	7,883			$	7,988
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs	$	779,742			$	744,928

(1) Weighted average interest rate excludes amortization of debt issuance costs.

As of March 31, 2020, interest payable on these mortgages were at fixed rates ranging from 3.45% to 6.875%, with a weighted average interest rate of 4.04%. This compares to a weighted average interest rate of 4.03% as of September 30, 2019 and 4.07% as of March 31, 2019. As of March 31, 2020 and September 30, 2019, the weighted average loan maturity of the Fixed Rate Mortgage Notes Payable was 11.3 years. This compares to a weighted average loan maturity of the Fixed Rate Mortgage Notes Payable of 11.6 years as of March 31, 2019.

In connection with the two properties acquired during the six months ended March 31, 2020, which are located in the Indianapolis, IN MSA and in the Columbus, OH MSA (as described in Note 3), we obtained an 18 year fully-amortizing mortgage loan and a 10 year fully-amortizing loan, respectively. The two mortgage loans originally totaled $61.9 million with a weighted average maturity of 16.8 years and a weighted average interest rate of 4.15%.

During the quarter ended March 31, 2020, we fully repaid two self-amortizing mortgage loans for our properties located in Augusta, GA and Huntsville, AL. These loans were at a weighted average interest rate of 5.52%.

On November 15, 2019 we entered into a new line of credit facility (the “New Facility”) consisting of a $225.0 million unsecured line of credit facility (the “Revolver”) and a new $75.0 million unsecured term loan (the “Term Loan”), resulting in the total potential availability under both the Revolver and the Term Loan of $300.0 million, which is an additional $100.0 million over the former line of credit facility. In addition, the Revolver includes an accordion feature that will allow the total potential availability under the New Facility to further increase to $400.0 million, under certain conditions. The $225.0 million Revolver matures in January 2024 with two options to extend for additional six-month periods. Availability under the New Facility is limited to 60% of the value of the borrowing base properties. The value of the borrowing base properties is determined by applying a capitalization rate to the NOI generated by our unencumbered, wholly-owned industrial properties. Under the New Facility the capitalization rate applied to our NOI generated by our unencumbered, wholly-owned industrial properties was lowered from 6.5% under the former line of credit facility to 6.25%, thus increasing the value of the borrowing base properties under the terms of the New Facility. In addition, the interest rate for borrowings under the Revolver was lowered by a range of 5 basis points to 35 basis points, depending on our leverage ratio, and will, at our election, either i) bear interest at LIBOR plus 135 basis points to 205 basis points, depending on our leverage ratio, or ii) bear interest at Bank of Montreal’s (BMO) prime lending rate plus 35 basis points to 105 basis points, depending on our leverage ratio. Currently, our borrowings bear interest under the Revolver at LIBOR plus 145 basis points, which results in an interest rate of 3.05%. As of the quarter end and currently, we do not have any amount drawn down under our Revolver, resulting in the full $225.0 million being currently available. The $75.0 million Term Loan matures January 2025. The interest rate for borrowings under the Term Loan will at our election, either i) bear interest at LIBOR plus 130 basis points to 200 basis points, depending on our leverage ratio, or ii) bear interest at BMO’s prime lending rate plus 30 basis points to 100 basis points, depending on our leverage ratio. To reduce floating interest rate exposure under the Term Loan, we also entered into an interest rate swap agreement to fix LIBOR on the entire $75.0 million for the full duration of the Term Loan resulting in an all-in rate of 2.92%.

From time to time we may use a margin loan for temporary funding of acquisitions and for working capital purposes. This loan is due on demand and is collateralized by our securities portfolio. We must maintain a coverage ratio of approximately 50%. The interest rate charged on the margin loan is the bank’s margin rate and was 0.75% as of March 31, 2020 and 3.0% as of March 31, 2019. At March 31, 2020, there were no amounts drawn down under the margin loan and there was $19.8 million drawn down under the margin loan as of March 31, 2019.