DEBT OBLIGATIONS

The following table sets forth information regarding the Company’s consolidated debt obligations outstanding at September 30, 2012 and December 31, 2011 (in thousands):

MORTGAGE DEBT:



Property / Location	September 30, 2012			December 31, 2011			Effective Interest Rate			Maturity Date
Newtown Square/Berwyn Park/Libertyview	$	55,289		$	56,538		7.25	%		May-13
Southpoint III	1,317			1,887			7.75	%		Apr-14
Tysons Corner	93,625			94,882			5.36	%	(a)	Aug-15
Two Logan Square	89,524			89,800			7.57	%		Apr-16
Fairview Eleven Tower	22,000			22,000			4.25	%		Jan-17
IRS Philadelphia Campus	198,592			202,905			7.00	%		Sep-30
Cira South Garage	42,834			44,379			7.12	%		Sep-30
Principal balance outstanding	503,181			512,391
Plus: fair market value premiums (discounts), net	(1,058		)	(1,330		)
Total mortgage indebtedness	$	502,123		$	511,061
UNSECURED DEBT:
Former Term Loan	—			37,500			LIBOR + 0.80%		(b)	Feb-12
Former Revolving Credit Facility	—			275,500			LIBOR + 0.725%		(b)	Feb-12
New Credit Facility	—			—			LIBOR + 1.50%		(b)	Feb-16
Three-Year Term Loan - Swapped to fixed	150,000			—			2.60	%	(b)	Feb-15
Four-Year Term Loan - Swapped to fixed	150,000			—			2.88	%	(b)	Feb-16
Four-Year Term Loan - Variable	100,000			—			LIBOR + 1.75%		(b)	Feb-16
Seven-Year Term Loan - Swapped to fixed	200,000			—			3.62	%	(b)	Feb-19
$300.0M 5.750% Guaranteed Notes due 2012	—			151,491			5.73	%	(c)	Apr-12
$250.0M 5.400% Guaranteed Notes due 2014	238,379			242,681			5.53	%		Nov-14
$250.0M 7.500% Guaranteed Notes due 2015	216,819			227,329			7.77	%		May-15
$250.0M 6.000% Guaranteed Notes due 2016	250,000			250,000			5.95	%		Apr-16
$300.0M 5.700% Guaranteed Notes due 2017	300,000			300,000			5.75	%		May-17
$325.0M 4.950% Guaranteed Notes due 2018	325,000			325,000			5.14	%		Apr-18
Indenture IA (Preferred Trust I)	27,062			27,062			2.75	%		Mar-35
Indenture IB (Preferred Trust I)	25,774			25,774			3.30	%		Apr-35
Indenture II (Preferred Trust II)	25,774			25,774			3.09	%		Jul-35
Principal balance outstanding	2,008,808			1,888,111
plus: original issue premium (discount), net	(4,342		)	(5,177		)
Total unsecured indebtedness	$	2,004,466		$	1,882,934
Total Debt Obligations	$	2,506,589		$	2,393,995


(a)	This loan was assumed upon acquisition of the related property. The interest rate reflects the market rate at the time of acquisition.

(b)

On February 1, 2012, the Company closed on a new $600.0 million four-year unsecured credit facility and three unsecured term loans (the "New Term Loans") totaling $600.0 million which consist of a $150.0 million three-year loan, a $250.0 million four-year loan and a $200.0 million seven-year loan. The Company used a portion of the net proceeds from the term loans to repay all balances outstanding under its former Revolving Credit Facility and its former $183.0 million Bank Term Loan which were then retired prior to their scheduled June 29, 2012 maturity.


(c)	Notes matured on April 1, 2012, and were repaid using a portion of the proceeds from the term loans.

During the nine-month periods ended September 30, 2012 and September 30, 2011, the Company’s weighted-average effective interest rate on its mortgage notes payable was 6.72% and 6.83%, respectively.

During the nine-months ended September 30, 2012, the Company repurchased $15.1 million of its outstanding unsecured Notes in a series of transactions that are summarized in the following table (in thousands):



Notes	Repurchase Amount		Principal		Loss			Deferred Financing Amortization
2012 5.750% Notes	$	309	$	301	$	(2	)	$	—
2014 5.400% Notes	4,630		4,302		(263		)	8
2015 7.500% Notes	12,011		10,510		(1,284		)	10
	$	16,950	$	15,113	$	(1,549	)	$	18

The Parent Company unconditionally guarantees the unsecured debt obligations of the Operating Partnership (or is a co-borrower with the Operating Partnership) but does not by itself incur unsecured indebtedness.

The Company utilizes its unsecured new revolving credit facility (the "New Credit Facility") for potential borrowings and for general business purposes, including the acquisition, development and redevelopment of properties and the repayment of other debt. The maturity date of the New Credit Facility in place at September 30, 2012 is February 1, 2016. The per annum variable interest rate on any related outstanding balances, for which there were none at September 30, 2012, is LIBOR plus 1.50%. The interest rate and facility fee are subject to adjustment upon a change in the Company’s unsecured debt ratings. As of September 30, 2012, the Company had no related borrowings, with $2.8 million in letters of credit outstanding, leaving $597.2 million of unused availability under the New Credit Facility. During the nine-months ended September 30, 2011, the weighted-average interest rate on the Former Credit Facility borrowings was 0.98%. As of September 30, 2011, the weighted average interest rate on the Former Credit Facility was 0.95%. There were no comparable rates as of September 30, 2012 due to the fact that the Company had no borrowings on its New Credit Facility during the current period.

The Company has the option to increase the amounts available to be advanced under the New Credit Facility, the $150.0 million three-year term loan, and the $250.0 million four-year term loan by an aggregate of $200.0 million, subject to customary conditions and limitations, by obtaining additional commitments from the current lenders and other financial institutions. The Company also has the option to extend the maturity dates of each of the New Credit Facility, the $150.0 million three-year term loan and the $250.0 million four-year term loan by one year, subject to payment of an extension fee and other customary conditions and limitations. The $150.0 million three-year term and the $250.0 million four-year term loans can be prepaid by the Company at any time without penalty. The $200.0 million seven-year term loan is subject to a declining prepayment penalty ranging from 3.00% a year after closing, 2.00% after two years, 1.00% after three years and without penalty thereafter.

The spread to LIBOR for LIBOR-based loans under the New Credit Facility and New Term Loans will depend on the Company's unsecured senior debt credit rating. Based on the Company's current credit rating, the spread for such loans will be 150, 175, 175 and 190 basis points under the New Credit Facility, the $150.0 million three-year term loan, the $250.0 million four-year term loan and the $200.0 million seven-year term loan, respectively. At the Company's option, loans under the New Credit Facility and New Term Loans may also bear interest at a per annum floating rate equal to the higher of the prime rate or the federal funds rate plus 0.50% per annum. The New Credit Facility contains a competitive bid option that allows banks that are part of the lender consortium to bid to make loans to the Company at a reduced rate. The Company executed hedging transactions that fix the rate on the $200.0 million seven-year term loan at a 3.623% average rate for its full term, and the rate on $300.0 million of notional principal for the other loans at rates in a range of 2.470% to 2.910% for periods of three to five years. All hedges commenced on February 1, 2012 and the rates are inclusive of the LIBOR spread based on the current investment grade rating. See Note 9 for details of the interest rate swaps entered into as of September 30, 2012.

The New Credit Facility and New Term Loans contain financial and operating covenants and restrictions. The Company was in compliance with all such restrictions and financial covenants as of September 30, 2012.

As of September 30, 2012, the Company’s aggregate scheduled principal payments of debt obligations, excluding amortization of discounts and premiums, were as follows (in thousands):



2012	$	3,262
2013	66,924
2014	250,612
2015	466,853
2016	596,608
Thereafter	1,127,730
Total principal payments	2,511,989
Net unamortized premiums/(discounts)	(5,400		)
Outstanding indebtedness	$	2,506,589