6. DEBT OBLIGATIONS

The following table sets forth information regarding the Company’s consolidated debt obligations outstanding at June 30, 2016 and December 31, 2015 (in thousands):

	June 30, 2016			December 31, 2015			Effective Interest Rate				Maturity Date
MORTGAGE DEBT:

Fairview Eleven Tower (a)	$	20,665		$	20,838			4.25	%		Jan 2017
Two Logan Square		86,774			86,886			3.98	%	(b)	May 2020
One Commerce Square		128,661			130,000			3.64	%		Apr 2023
Two Commerce Square		112,000			112,000			4.51	%	(c)	Apr 2023
IRS Philadelphia Campus (d)		-			177,425			7.00	%		Sep 2030
Cira South Garage (d)		-			35,546			7.12	%		Sep 2030
Principal balance outstanding		348,100			562,695
Plus: fair market value premium (discount), net		(2,979	)		(3,198	)
Less: deferred financing costs		(813	)		(13,744	)
Mortgage indebtedness	$	344,308		$	545,753

UNSECURED DEBT
Seven-Year Term Loan - Swapped to fixed	$	250,000		$	250,000			3.72	%		Oct 2022
$250.0M 6.00% Guaranteed Notes due 2016 (e)		-			149,919			5.95	%		Apr 2016
$300.0M 5.70% Guaranteed Notes due 2017		300,000			300,000			5.68	%		May 2017
$325.0M 4.95% Guaranteed Notes due 2018		325,000			325,000			5.13	%		Apr 2018
$250.0M 3.95% Guaranteed Notes due 2023		250,000			250,000			4.02	%		Feb 2023
$250.0M 4.10% Guaranteed Notes due 2024		250,000			250,000			4.33	%		Oct 2024
$250.0M 4.55% Guaranteed Notes due 2029		250,000			250,000			4.60	%		Oct 2029
Indenture IA (Preferred Trust I)		27,062			27,062			2.75	%		Mar 2035
Indenture IB (Preferred Trust I)		25,774			25,774			3.30	%		Apr 2035
Indenture II (Preferred Trust II)		25,774			25,774			3.09	%		Jul 2035
Principal balance outstanding		1,703,610			1,853,529
Plus: original issue premium (discount), net		(5,186	)		(5,714	)
Less: deferred financing costs		(8,111	)		(8,851	)
Total unsecured indebtedness	$	1,690,313		$	1,838,964
Total Debt Obligations	$	2,034,621		$	2,384,717

(a)

Represents the full debt amount of a property in a consolidated real estate venture in which the Company holds a 50% interest.

(b)

On April 7, 2016, the Company closed on an $86.9 million first mortgage financing on Two Logan Square, a 708,844-square foot office property located in Philadelphia, Pennsylvania. Proceeds of the loan were used to repay, without penalty, the $86.6 million principal balance of the former Two Logan Square first mortgage loan, which had a 7.57% effective interest rate.

(c)This loan was assumed upon acquisition of Two Commerce Square on December 19, 2013. The interest rate reflects the market rate at the time of acquisition. A default under this loan will also constitute a default under the loan outstanding on One Commerce Square, and a default under the One Commerce Square loan will also constitute a default under this loan. This loan is also secured by a lien on One Commerce Square and the loan on Two Commerce Square.

(d)On January 14, 2016, the Company funded $265.8 million to prepay two mortgage loans, consisting of $176.9 million of principal repayment, $44.5 million in prepayment charges and a nominal amount of accrued interest, in repayment of the mortgage indebtedness on the office property located at 2970 Market Street in Philadelphia, Pennsylvania commonly known as 30^th Street Main Post Office (“Cira Square”), ahead of its scheduled maturity date of September 10, 2030. Also on January 14, 2016, the Company funded $44.4 million, consisting of $35.5 million of principal repayment, $8.9 million in prepayment charges and a nominal amount of accrued interest, in repayment of the mortgage indebtedness of a 1,662 parking space facility located in Philadelphia, Pennsylvania commonly known as (“Cira South Garage”), ahead of its scheduled maturity date of September 10, 2030. These repayments were financed with $195.0 million of funds available under the unsecured revolving credit facility with the remaining balance funded through available cash balances. The Company recognized a $66.6 million loss on extinguishment of debt, consisting of the prepayment charges along with $10.8 million and $2.4 million related to non-cash charges for deferred financing costs for Cira Square and Cira South Garage, respectively.

(e)On April 1, 2016, the entire principal balance of the 2016 6.00% Guaranteed Unsecured Notes was repaid upon maturity. Available cash balances were used to fund the repayment of the unsecured notes.

As of June 30, 2016, and December 31, 2015, the Company’s weighted-average effective interest rate on its mortgage notes payable was 4.04% and 5.72%, respectively. As of June 30, 2016 and December 31, 2015, the net carrying value of the Company’s Properties that are encumbered by mortgage indebtedness was $348.1 million and $562.7 million, respectively.

On May 15, 2015, the Company closed on a new four-year unsecured revolving credit facility that provides for borrowings of up to $600.0 million. The Company had no borrowings under its unsecured revolving credit facility as of June 30, 2016.

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 Parent Company has no material assets other than its investment in the Operating Partnership.

The Company was in compliance with all financial covenants as of June 30, 2016. Management continuously monitors the Company’s compliance with and anticipated compliance with the covenants. Certain of the covenants restrict management’s ability to obtain alternative sources of capital. While the Company currently believes it will remain in compliance with its covenants, in the event that the economy deteriorates in the future, the Company may not be able to remain in compliance with such covenants, in which case a default would result absent a lender waiver.