Loans and Mortgages Payable

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Loans and Mortgages Payable

NOTE 5 – LOANS AND MORTGAGES PAYABLE

Unsecured Line of Credit

On March 28, 2017, the Company entered into an amended and restated credit agreement to renew and expand its existing unsecured revolving credit facility. The new unsecured revolving credit facility (the “Facility”) was syndicated with BMO Capital Markets (“BMO”), as sole lead arranger and sole book runner, with Bank of Montreal as administrative agent. The Facility provides for an increase from $35 million in available borrowings to $50 million in available borrowings with a $75 million accordion feature, bringing the total potential availability up to $125 million, subject to certain conditions. The maturity date of the Facility is March 27, 2020, with a one year extension option. Borrowings will bear interest at the Company’s option of LIBOR plus 1.75% to 2.50% or BMO’s prime lending rate plus 0.75% to 1.50%, based on the Company’s overall leverage. Based on the Company’s current leverage ratio, borrowings under the Facility will bear interest at LIBOR plus 2% or at BMO’s prime lending rate plus 1%. As of September 30, 2017, there were no amounts outstanding under the Facility.

Loans Payable

Loans Payable includes unamortized debt issuance costs of $113,022 and $108,054 at September 30, 2017 and December 31, 2016, respectively. The weighted average interest rate was 2.7% and 3.1% at September 30, 2017 and December 31, 2016. At September 30, 2017, $30,842,204 was outstanding on the margin loan at a 2.05% interest rate.

In June 2017, the Company entered into an amended and restated revolving line of credit with OceanFirst Bank (“OceanFirst Line”), secured by the Company’s eligible notes receivable. The maximum availability on the OceanFirst Line is $10 million. Interest was reduced from prime plus 50 basis points to prime plus 25 basis points. The new maturity date is June 1, 2020. As of September 30, 2017, the amount outstanding under the OceanFirst Line was $4 million and the interest rate was 4.5%.

Mortgages Payable

On January 20, 2017, the Company obtained a $14,250,000 Federal Home Loan Mortgage Corporation (“Freddie Mac”) mortgage through Wells Fargo Bank, N.A. (“Wells Fargo”) on Boardwalk and Parke Place in connection with the Company’s acquisition of these communities. This mortgage is at a fixed rate of 4.56% and matures on February 1, 2027. Principal repayments are based on a 30-year amortization schedule.

On May 31, 2017, the Company obtained a $16,800,000 Freddie Mac mortgage through Wells Fargo on Highland Estates. This mortgage is at a fixed rate of 4.12% and matures on September 1, 2027. Principal repayments are based on a 30-year amortization schedule. Proceeds from this mortgage was used to repay the existing $9,000,000 mortgage with an interest rate of 6.175%.

On August 28, 2017, the Company obtained a $13,370,000 mortgage loan on six communities from Sun National Bank. This mortgage is at a fixed rate of 4.18% and matures on August 1, 2027. Principal repayments are based on a 30-year amortization schedule. Proceeds from this mortgage was used to repay the existing $10,000,000 mortgage, secured by eleven communities with an interest rate of LIBOR plus 3%, which was fixed at 3.89% with an interest rate swap.

The following is a summary of our mortgages payable as of September 30, 2017 and December 31, 2016:

	9/30/2017						12/31/2016
	Amount			Rate			Amount			Rate
Fixed rate mortgages	$	316,337,850			4.3	%	$	285,584,102			4.4	%
Variable rate mortgages (1)		102,651			4.3	%		10,979,881			3.9	%
Total mortgages before unamortized debt issuance costs		316,440,501			4.3	%		296,563,983			4.3	%
Unamortized debt issuance costs		(3,632,321	)					(3,538,391	)
Mortgages, net of unamortized debt issuance costs	$	312,808,180			4.4	%	$	293,025,592			4.4	%

(1) Includes a variable rate mortgage with a balance of $-0- and $10,625,352 as of September 30, 2017 and December 31, 2016, respectively, which was effectively fixed at an interest rate of 3.89% with an interest rate swap agreement.