Debt Obligations (Tables)

12 Months Ended

Dec. 31, 2017

The following table sets forth information regarding the Company’s consolidated debt obligations outstanding at December 31, 2017 and 2016 (in thousands):

	December 31, 2017			December 31, 2016			Effective Interest Rate		Maturity Date
MORTGAGE DEBT:
Two Logan Square	$	84,440		$	86,012		3.98%		May 2020
One Commerce Square		123,667			127,026		3.64%	(a)	Apr 2023
Two Commerce Square		112,000			112,000		4.51%	(b)	Apr 2023
Principal balance outstanding		320,107			325,038
Plus: fair market value premium (discount), net		(2,325	)		(2,761	)
Less: deferred financing costs		(566	)		(728	)
Mortgage indebtedness	$	317,216		$	321,549

UNSECURED DEBT
Seven-Year Term Loan - Swapped to fixed	$	250,000		$	250,000		3.72%		Oct 2022
$300.0M 5.70% Guaranteed Notes due 2017 (c)		-			300,000		5.68%		May 2017
$325.0M 4.95% Guaranteed Notes due 2018 (d)		-			325,000		5.13%		Apr 2018
$350.0M 3.95% Guaranteed Notes due 2023 (d)		350,000			250,000		3.87%		Feb 2023
$250.0M 4.10% Guaranteed Notes due 2024		250,000			250,000		4.33%		Oct 2024
$450.0M 3.95% Guaranteed Notes due 2027 (d)		450,000			-		4.03%		Nov 2027
$250.0M 4.55% Guaranteed Notes due 2029		250,000			250,000		4.60%		Oct 2029
Indenture IA (Preferred Trust I) (e)		27,062			27,062		LIBOR + 1.25%		Mar 2035
Indenture IB (Preferred Trust I) - Swapped to fixed		25,774			25,774		3.30%		Apr 2035
Indenture II (Preferred Trust II) - Swapped to fixed		25,774			25,774		3.09%		Jul 2035
Principal balance outstanding		1,628,610			1,703,610
Plus: original issue premium (discount), net		(4,423	)		(4,678	)
Less: deferred financing costs		(10,575	)		(7,369	)
Total unsecured indebtedness	$	1,613,612		$	1,691,563
Total Debt Obligations	$	1,930,828		$	2,013,112

(a)

This loan was assumed upon acquisition of the related properties on December 19, 2013. On December 29, 2015, the Company refinanced the debt increasing the principal balance to $130.0 million and extended the scheduled maturity date from January 6, 2016 to April 5, 2023. A default under this loan will also constitute a default under the loan secured by Two Commerce Square. This loan is also secured by a lien on Two Commerce Square.

(b)

This loan was assumed upon acquisition of the related property 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 secured by One Commerce Square. This loan is also secured by a lien on One Commerce Square.

(c)	On May 1, 2017, the entire principal balance of the unsecured 5.70% Guaranteed Notes was repaid upon maturity. Available cash balances and the Credit Facility (as defined below) were used to fund the repayment of the unsecured notes.

(d)

On November 17, 2017, the Company completed an offering of $450.0 million 3.95% Guaranteed Notes due 2027 (the “2027 Notes) and reopened the 3.95% Guaranteed Notes due 2023 (the “2023 Notes”) for an additional $100.0 million. On November 17, 2017, the Company redeemed the remaining outstanding balance of the 4.95% Guaranteed Notes due 2018 (the “2018 Notes”) ahead of its scheduled maturity. See below for further discussion.

(e)	On September 30, 2017, the interest rate hedge contract for the Preferred Trust I expired. Subsequent to this expiration, the debt bears interest at a variable rate of LIBOR + 1.25%.

Summary of debt repurchases

The following table provides additional information on the Company’s repurchase of $325.0 million in the aggregate principal amount of its outstanding unsecured notes (consisting of the 2018 Notes, as indicated above) during the twelve months ended December 31, 2017 (in thousands). There were no repurchases of unsecured debt during the twelve months ended December 31, 2016 and 2015.

Notes	Principal				Repurchase Amount (a)				Loss on Early Extinguishment of Debt (b)
2018 4.95% Notes	$	325,000			$	330,792			$	(3,933	)

(a)	Includes prepayment penalties with respect to the redemption of debt.

(b)	Includes unamortized balance of the original issue discount and deferred financing costs.

Schedule of Maturities of Long-term Debt

As of December 31, 2017, the Company’s aggregate scheduled principal payments of debt obligations, excluding amortization of discounts and premiums, are as follows (in thousands):

2018	$	6,601
2019		7,360
2020		86,978
2021		6,099
2022		256,332
Thereafter		1,585,347
Total principal payments		1,948,717
Net unamortized premiums/(discounts)		(6,748	)
Net deferred financing costs		(11,141	)
Outstanding indebtedness	$	1,930,828