DEBT

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

DEBT

DEBT

As of June 30, 2021, 44 apartment communities were not encumbered by mortgages, with 29 of those properties providing credit support for the unsecured borrowings. The Company’s primary unsecured credit facility (“unsecured credit facility”) is a revolving, multi-bank line of credit, with the Bank of Montreal serving as administrative agent. The line of credit has total commitments and borrowing capacity of $250.0 million, based on the value of properties contained in the unencumbered asset pool (“UAP”). As of June 30, 2021, the additional borrowing availability was $163.0 million beyond the $87.0 million drawn, including the balance on the operating line of credit (discussed below). The unsecured credit facility matures on August 31, 2022, with one twelve-month option to extend the maturity date at the Company’s election.

Under the unsecured credit facility, the Company also has unsecured term loans of $70.0 million and $75.0 million, included within notes payable on the Condensed Consolidated Balance Sheets, which mature on January 15, 2024 and on August 31, 2025, respectively.

The interest rates on the line of credit and term loans are based, at the Company’s option, on either the lender’s base rate plus a margin, ranging from 35-85 basis points, or the London Interbank Offered Rate (“LIBOR”), plus a margin that ranges from 135-190 basis points based on the consolidated leverage ratio, as defined under the Second Amended and Restated Credit Agreement. The unsecured credit facility and unsecured senior notes are subject to customary financial covenants and limitations. The Company believes that it is in compliance with all such financial covenants and limitations as of June 30, 2021.

In January, Centerspace amended and expanded its private shelf agreement to increase the aggregate amount available for issuance of unsecured senior promissory notes (“unsecured senior notes”) to $225.0 million. Under this agreement, the Company issued $75.0 million of Series A notes due September 13, 2029 bearing interest at a rate of 3.84% annually, $50.0 million of Series B notes due September 30, 2028 bearing interest at a rate of 3.69% annually, and $50.0 million of Series C notes due June 6, 2030 bearing interest at a rate of 2.70% annually. Under the private shelf agreement, there is $50.0 million remaining available.

As of June 30, 2021, Centerspace owned 18 apartment communities that served as collateral for mortgage loans. All of these mortgage loans were non-recourse to the Company other than for standard carve-out obligations. As of June 30, 2021, the Company believes that there are no material defaults or instances of noncompliance in regards to any of these mortgages payable.

Centerspace also has a $6.0 million operating line of credit. This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances. This operating line matures on August 31, 2021, with pricing based on a market spread plus the one-month LIBOR index rate.

The following table summarizes indebtedness:

	(in thousands)
	June 30, 2021			December 31, 2020			Weighted Average Maturity in Years at June 30, 2021
Lines of credit	$	87,000		$	152,871		1.17
Term loans (1)	145,000			145,000			3.39
Unsecured senior notes (1)	175,000			125,000			8.15
Unsecured debt	407,000			422,871			4.96
Mortgages payable - fixed	288,363			298,445			4.87
Total debt	$	695,363		$	721,316		4.92
Weighted average interest rate on lines of credit (rate with swap)	2.21		%	2.85		%
Weighted average interest rate on term loans (rate with swap)	4.15		%	4.15		%
Weighted average interest rate on unsecured senior notes	3.47		%	3.78		%
Weighted average interest rate on mortgages payable	3.90		%	3.93		%
Weighted average interest rate on total debt	3.70		%	3.62		%

(1)Included within notes payable on the Condensed Consolidated Balance Sheets.

The aggregate amount of required future principal payments on term loans, unsecured senior notes, and mortgages payable as of June 30, 2021, was as follows:

	(in thousands)
2021 (remainder)	$	15,583
2022	37,219
2023	45,068
2024	3,777
2025	102,505
Thereafter	404,211
Total payments	$	608,363