Indebtedness

All debt is held directly or indirectly by the Partnership. The General Partner does not have any indebtedness, but does guarantee all of the unsecured debt of the Partnership.

The following table summarizes the book value and changes in the fair value of our debt for the six months ended June 30, 2013 (in thousands):



	Book Value at 12/31/12		Book Value at 6/30/13		Fair Value at 12/31/12		Issuances and Assumptions		Payments/Payoffs			Adjustments to Fair Value			Fair Value at 6/30/13
Fixed rate secured debt	$	1,149,541	$	1,221,348	$	1,251,477	$	103,638	$	(30,349	)	$	(15,971	)	$	1,308,795
Variable rate secured debt	18,412		20,179		18,386		1,933		—			(170		)	20,149
Unsecured debt	2,993,217		3,067,250		3,336,386		500,000		(425,967		)	(119,387		)	3,291,032
Unsecured line of credit	285,000		88,000		285,632		—		(197,000		)	(632		)	88,000
Total	$	4,446,170	$	4,396,777	$	4,891,881	$	605,571	$	(653,316	)	$	(136,160	)	$	4,707,976

Secured Debt

Because our fixed rate secured debt is not actively traded in any marketplace, we utilized a discounted cash flow methodology to determine its fair value. Accordingly, we calculated fair value by applying an estimate of the current market rate to discount the debt's remaining contractual cash flows. Our estimate of a current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. The estimated rates ranged from 3.50% to 4.90%, depending on the attributes of the specific loans. The current market rates we utilized were internally estimated; therefore, we have concluded that our determination of fair value for our fixed rate secured debt was primarily based upon Level 3 inputs.

During the six months ended June 30, 2013, we repaid three secured loans, at their maturity dates, totaling $22.7 million. These loans had a weighted average stated interest rate of 5.73%.

During the six months ended June 30, 2013, we assumed three secured loans, in conjunction with our acquisition activity, with a total face value of $99.3 million and a fair value of $103.6 million. These assumed loans have a weighted average remaining term at acquisition of 1.8 years and carry a weighted average stated interest rate of 5.59%. We used an estimated market interest rate of 3.00% in determining the fair value of these loans. Between the date of acquisition and the end of the most recent reporting period, interest rates increased, resulting in our estimated market interest rate for these loans increasing to 3.50%.

Unsecured Debt

At June 30, 2013, with the exception of the $250.0 million variable rate term note described below, all of our unsecured debt bears interest at fixed rates and primarily consists of unsecured notes that are publicly traded. We utilized broker estimates in estimating the fair value of our fixed rate unsecured debt. Our unsecured notes are thinly traded and, in certain cases, the broker estimates were not based upon comparable transactions. The broker estimates took into account any recent trades within the same series of our fixed rate unsecured debt, comparisons to recent trades of other series of our fixed rate unsecured debt, trades of fixed rate unsecured debt from companies with profiles similar to ours, as well as overall economic conditions. We reviewed these broker estimates for reasonableness and accuracy, considering whether the estimates were based upon market participant assumptions within the principal and most advantageous market and whether any other observable inputs would be more accurate indicators of fair value than the broker estimates. We concluded that the broker estimates were representative of fair value. We have determined that our estimation of the fair value of our fixed rate unsecured debt was primarily based upon Level 3 inputs, as defined. The estimated trading values of our fixed rate unsecured debt, depending on the maturity and coupon rates, ranged from 93.00% to 125.00% of face value.

In March 2013, we issued $250.0 million of unsecured notes that bear interest at 3.625%, have an effective rate of 3.72%, and mature on April 15, 2023.

In May 2013, we issued and fully drew down on a term loan with an aggregate commitment of $250.0 million that bears interest at a variable rate of LIBOR plus 1.35% (equal to 1.55% for outstanding borrowings as of June 30, 2013) and matures May 14, 2018.

During the six months ended June 30, 2013, we repaid two unsecured notes at their maturity dates totaling $425.0 million. These notes had a weighted average effective rate of 6.40% and a weighted average stated rate of 5.68%.

The indentures (and related supplemental indentures) governing our outstanding series of notes also require us to comply with financial ratios and other covenants regarding our operations. We were in compliance with all such covenants as of June 30, 2013.

Unsecured Line of Credit

Our unsecured line of credit as of June 30, 2013 is described as follows (in thousands):



Description	Maximum Capacity		Maturity Date	Outstanding Balance at June 30, 2013
Unsecured Line of Credit - Partnership	$	850,000	December 2015	$	88,000

The Partnership's unsecured line of credit has an interest rate on borrowings of LIBOR plus 1.25% (equal to 1.45% for outstanding borrowings as of June 30, 2013) and a maturity date of December 2015. Subject to certain conditions, the terms also include an option to increase the facility by up to an additional $400.0 million, for a total of up to $1.25 billion.

This line of credit provides us with an option to obtain borrowings from financial institutions that participate in the line at rates that may be lower than the stated interest rate, subject to certain restrictions.

This line of credit contains financial covenants that require us to meet certain financial ratios and defined levels of performance, including those related to fixed charge coverage, unsecured interest expense coverage and debt-to-asset value (with asset value being defined in the Partnership's unsecured line of credit agreement). As of June 30, 2013, we were in compliance with all covenants under this line of credit.

To the extent that there are outstanding borrowings, we utilize a discounted cash flow methodology in order to estimate the fair value of our unsecured line of credit. The net present value of the difference between future contractual interest payments and future interest payments based on our estimate of a current market rate represents the difference between the book value and the fair value. Our estimate of a current market rate is based upon the rate, considering current market conditions and our specific credit profile, at which we estimate we could obtain similar borrowings. The current market rate of 1.7% that we utilized was internally estimated; therefore, we have concluded that our determination of fair value for our unsecured line of credit was primarily based upon a Level 3 input, as defined.