MORTGAGE NOTES AND LOANS PAYABLE

12 Months Ended

Sep. 30, 2021

Mortgage Notes And Loans Payable

MORTGAGE NOTES AND LOANS PAYABLE

NOTE 7- MORTGAGE NOTES AND LOANS PAYABLE

Mortgage Notes Payable:

As of September 30, 2021, we owned 122 properties, of which 60 carried Fixed Rate Mortgage Notes Payable with outstanding principal balances totaling $839.6 million. Interest is payable on these mortgages at fixed rates ranging from 2.95% to 6.75%, with a weighted average interest rate of 3.86%. This compares to a weighted average interest rate of 3.98% as of September 30, 2020. As of September 30, 2021, the weighted average loan maturity of the Mortgage Notes Payable was 10.9 years. This compares to a weighted average loan maturity of the Mortgage Notes Payable of 11.1 years as of September 30, 2020.

As described in Note 3, during fiscal year ended September 30, 2021, we entered into two mortgages in connection with two of the four acquisitions we acquired during the 2021 fiscal year. These two mortgages consisted of one 15 year fully-amortizing mortgage loan and one 17 year fully-amortizing mortgage loan. These two mortgage loans originally totaled $104.0 million, with an original weighted average mortgage loan maturity of 16.1 years with interest rates ranging from 2.95% to 3.25% resulting in a weighted average interest rate of 3.11%. In connection with the remaining two properties acquired during the 2021 fiscal year, we entered into commitments for two, 15 year, fully-amortizing mortgage loans. These four fully-amortizing loans have a weighted average term of 15.7 years. The principal amount of the four mortgage loans originally totaled $161.8 million with fixed interest rates ranging from 2.50% to 3.25%, resulting in a weighted average fixed interest rate of 2.89%.

Subsequent to fiscal yearend, on October 27, 2021, we purchased a newly constructed 291,000 square foot industrial building, situated on 46.0 acres, located in the Birmingham, AL MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through July 2036. The property was acquired for a purchase price of $30.2 million. Annual rental revenue over the remaining term of the lease averages $1.7 million. We obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $19.3 million at a fixed interest rate of 2.40%, which has not yet closed.

During the fiscal year ended September 30, 2021, we fully prepaid four self-amortizing mortgage loans for our properties located in Carlstadt, NJ, Houston, TX, Kansas City, KS and Topeka, KS. These loans were at a weighted average interest rate of 5.35%. Subsequent to fiscal yearend, on November 1, 2021, we fully prepaid a $7.3 million mortgage loan for our property located in Streetsboro (Cleveland), OH. The loan had an interest rate of 5.5%.

During the fiscal year ended September 30, 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%.

The following is a summary of our Fixed Rate Mortgage Notes Payable as of September 30, 2021 and 2020 (in thousands):

	9/30/21						9/30/20
	Amount			Weighted Average Interest Rate (1)			Amount			Weighted Average Interest Rate (1)
Fixed Rate Mortgage Notes Payable	$	839,622			3.86	%	$	807,371			3.98	%
Debt Issuance Costs	$	12,643					$	12,377
Accumulated Amortization of Debt Issuance Costs		(5,205	)					(4,513	)
Unamortized Debt Issuance Costs	$	7,438					$	7,864
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs	$	832,184					$	799,507

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

The following is a summary of our mortgage notes payable by property at September 30, 2021 and 2020 (in thousands):

Property		Fixed Rate			Maturity Date	Balance 9/30/21		Balance 9/30/20
Topeka, KS	(1)		6.50	%	08/10/21	$	0	$	288
Streetsboro, OH (Cleveland)	(2)		5.50	%	11/01/21		7,332		8,025
Kansas City, MO	(1)		5.18	%	12/01/21		0		6,273
Olive Branch, MS (Memphis, TN)(Anda Pharmaceuticals, Inc.)			4.80	%	04/01/22		5,558		6,259
Waco, TX			4.75	%	08/01/22		3,280		3,613
Houston, TX	(1)		6.88	%	09/10/22		0		1,102
Tolleson, AZ (Phoenix)			3.95	%	11/01/22		1,103		2,010
Edwardsville, KS (Kansas City)(International Paper)			3.45	%	11/01/23		6,804		7,627
Spring, TX (Houston)			4.01	%	12/01/23		5,931		6,623
Memphis, TN			4.50	%	01/01/24		2,364		3,304
Oklahoma City, OK (FDX Ground)			4.35	%	07/01/24		1,767		2,341
Indianapolis, IN			4.00	%	09/01/24		7,366		8,431
Frankfort, KY (Lexington)			4.84	%	12/15/24		13,483		14,611
Carrollton, TX (Dallas)			6.75	%	02/01/25		3,781		4,733
Altoona, PA	(3)		4.00	%	10/01/25		1,987		2,426
Green Bay, WI	(3)		4.00	%	10/01/25		1,613		1,971
Stewartville, MN (Rochester)	(3)		4.00	%	10/01/25		1,292		1,578
Carlstadt, NJ (New York, NY)	(4)		5.25	%	05/15/26		0		1,227
Roanoke, VA (FDX Ground)			3.84	%	07/01/26		2,866		3,395
Livonia, MI (Detroit)			4.45	%	12/01/26		4,267		4,973
Oklahoma City, OK (Amazon)			3.64	%	12/01/27		16,501		17,369
Olive Branch, MS (Memphis, TN) (Milwaukee Tool)			3.76	%	10/01/28		16,095		18,042
Tulsa, OK			4.58	%	11/01/28		1,267		1,413
Oklahoma City, OK (Bunzl)			4.13	%	07/01/29		4,243		4,692
Lindale, TX (Tyler)			4.57	%	11/01/29		4,393		4,827
Sauget, IL (St. Louis, MO)			4.40	%	11/01/29		6,659		7,322
Jacksonville, FL (FDX Ground)			3.93	%	12/01/29		12,587		13,854
Lancaster (Columbus), OH			3.47	%	01/01/30		8,311		9,091
Imperial, PA (Pittsburgh)			3.63	%	04/01/30		8,734		9,586
Monroe, OH (Cincinnati)	(5)		3.77	%	04/01/30		5,567		6,107
Monroe, OH (Cincinnati)	(5)		3.85	%	04/01/30		5,886		6,453
Greenwood, IN (Indianapolis) (ULTA)			3.91	%	06/01/30		15,855		17,346
Ft. Worth, TX (Dallas)			3.56	%	09/01/30		16,364		17,879
Concord, NC (Charlotte)			3.87	%	12/01/30		14,197		15,449
Covington, LA (New Orleans)			4.08	%	01/01/31		8,917		9,686
Burlington, WA (Seattle/Everett)			3.67	%	05/01/31		14,264		15,471
Louisville, KY			3.74	%	07/01/31		5,267		5,702
Colorado Springs, CO			3.90	%	07/01/31		13,469		14,571
Davenport, FL (Orlando)			3.89	%	09/01/31		19,243		20,788
Olathe, KS (Kansas City)			3.96	%	09/01/31		16,217		17,513
Hamburg, NY (Buffalo)			4.03	%	11/01/31		17,411		18,770
Ft. Myers, FL			3.97	%	01/01/32		10,873		11,707
Savannah, GA (Shaw)			3.53	%	02/01/32		26,273		28,324
Walker, MI (Grand Rapids)			3.86	%	05/01/32		16,027		17,219
Mesquite, TX (Dallas)			3.60	%	07/01/32		25,461		27,350
Aiken, SC (Augusta, GA)			4.20	%	07/01/32		12,003		12,861
Homestead, FL (Miami)			3.60	%	07/01/32		19,193		20,616
Mobile, AL			4.14	%	07/01/32		15,609		16,728
Concord, NC (Charlotte)			3.80	%	09/01/32		20,587		22,067
Kenton, OH			4.45	%	10/01/32		9,592		10,247
Stow, OH			4.17	%	10/01/32		10,106		10,809
Charleston, SC (FDX)			4.23	%	12/01/32		11,444		12,222
Daytona Beach, FL			4.25	%	05/31/33		16,170		17,219
Charleston, SC (FDX Ground)			3.82	%	09/01/33		25,171		26,794

Property	Fixed Rate			Maturity Date	Balance 9/30/21		Balance 9/30/20
Braselton, GA (Atlanta)		4.02	%	10/01/33	$	33,730	$	35,856
Buckner, KY (Louisville)		4.17	%	11/01/33		12,993		13,796
Trenton, NJ		4.13	%	11/01/33		47,039		49,955
Savannah, GA (FDX Ground)		4.40	%	12/01/33		15,091		16,001
Lafayette, IN		4.25	%	08/01/34		15,234		16,101
Whitsett (Greensboro), NC		3.10	%	06/01/35		28,277		29,902
Ogden (Salt Lake City), UT		3.18	%	06/01/35		7,805		8,251
Oklahoma City, OK (Amazon)		3.00	%	10/01/35		9,272		9,750
Plain City (Columbus), OH		2.95	%	01/01/36		45,322		0
Greenwood (Indianapolis), IN (Amazon II)		4.27	%	11/01/37		48,802		50,855
Locust Grove (Atlanta), GA		3.25	%	01/01/38		55,307		0
Total Mortgage Notes Payable					$	839,622	$	807,371

(1) Loan was paid in full during fiscal 2021.

(2) Loan was paid in full subsequent to fiscal yearend 2021 on November 1, 2021.

(3) One self-amortizing loan is secured by Altoona, PA, Green Bay, WI and Stewartville (Rochester), MN.

(4) This property was sold during fiscal 2021 and loan was paid in full at closing.

(5) Two self-amortizing loans secured by same property.

Principal on the foregoing debt at September 30, 2021 is scheduled to be paid as follows (in thousands):

Year Ending September 30,	2022	$	81,537
	2023		67,234
	2024		80,674
	2025		75,069
	2026		66,263
	Thereafter		468,845
		$	839,622

Loans Payable:

BMO Capital Markets

The $250.0 million Loans Payable represents our $75.0 million unsecured term loan (the “Term Loan”) and $175.0 drawn down under our unsecured line of credit facility (the “Revolver”). On November 15, 2019, we entered into a new line of credit facility (the “New Facility”) consisting of a $225.0 million Revolver and a new $75.0 million 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 1.53%. As of the fiscal yearend and currently, we have $175.0 million drawn down under our Revolver, resulting in $50.0 million being currently available. Including the accordion feature, we have up to $150.0 million potentially available under the Revolver. As of September 30, 2021, Loans Payable represented $75.0 million outstanding under our Term Loan which matures January 2025 and $175.0 million outstanding under our Revolver which matures in January 2024. 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%.

Margin Loans

From time to time we use a margin loan for purchasing securities, 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 is 0.75%. At September 30, 2021 and 2020, there were no amounts drawn down under the margin loan.

For the three fiscal years ended September 30, 2021, 2020 and 2019, amortization of financing costs included in interest expense was $1.4 million, $1.4 million and $1.3 million, respectively.