Debt Obligations

12 Months Ended

Dec. 31, 2023

Debt Obligations

Debt Obligations

9. Debt Obligations

Unsecured Credit Facility. We have an unsecured credit agreement (the “Credit Agreement”) that provides for an aggregate commitment of the lenders of up to $500,000,000 comprising of a $400,000,000 revolving credit facility (the “Revolving Line of Credit”) and two $50,000,000 term loans (the “Term Loans”). The Credit Agreement permits us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1,000,000,000. The Term Loans mature on November 19, 2025 and November 19, 2026. The Revolving Line of Credit had a maturity date of November 19, 2025 and provided a one-year extension option at our discretion, subject to customary conditions. During the fourth quarter of 2022, we entered into the First Amendment to Third Amended and Restated Credit Agreement to replace LIBOR with SOFR, plus a credit spread adjustment of 10 basis points (“Adjusted SOFR”), as the reference rate for purpose of calculating interest under the agreement. Other material terms of the Credit Agreement remained unchanged. Further, subsequent to December 31, 2023, we entered into a Second Amendment to Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”) to accelerate the one-year extension option notice to January 4, 2024. Concurrently, we exercised our option to extend the maturity date of the Credit Agreement, as amended to November 19, 2026.

Based on our leverage at December 31, 2023, the Revolving Line of Credit provides for interest annually at Adjusted SOFR plus 115 points and a facility fee of 20 basis point and the Term Loans provide for interest annually at Adjusted SOFR plus 135 points.

Interest Rate Swap Agreements. In connection with entering into the Term Loans as discussed above, we entered into two receive variable/pay fixed interest rate swap agreements (“Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loans’ borrowings over the four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. In connection with entering into the First Amendment to Third Amended and Restated Credit Agreement discussed above, we entered into amendments to our Interest Rate Swaps to account for SOFR as the updated reference rate in the First Amendment to Third Amended and Restated Credit Agreement. During the year ended December 31, 2023 and 2022, we recorded $2,609,000 decrease and $8,891,000 increase, respectively, in fair value of Interest Rate Swaps.

The following table sets forth information regarding our Interest Rate Swaps at December 31, 2023 and 2022 (dollar amounts in thousands):

						Notional	Fair Value at December 31,
Date Entered	Maturity Date	Swap Rate		Rate Index		Amount		2023		2022
November 2021	November 19, 2025	2.62	%	1-month SOFR	$	50,000	$	2,698	$	4,003
November 2021	November 19, 2026	2.76	%	1-month SOFR		50,000		3,412		4,716
					$	100,000	$	6,110	$	8,719

Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 5.03%. The senior unsecured notes mature between 2024 and 2033. During year ended December 31, 2022, we sold $75,000,000 aggregate principal amount of 3.66% senior unsecured notes. The notes have an average 10-year life, scheduled principal payments and mature in May 2033.

The senior unsecured notes and Credit Agreement, including the Revolving Line of Credit and the Term Loans, contain financial covenants, which are measured quarterly, require us to maintain, among other things:

(i) a ratio of total indebtedness to total asset value not greater than 0.5 to 1.0;

(ii) a ratio of secured debt to total asset value not greater than 0.35 to 1.0;

(iii) a ratio of unsecured debt to the value of the unencumbered asset value not greater than 0.6 to 1.0; and

(iv) a ratio of EBITDA, as calculated in the Unsecured Credit Agreement, to fixed charges not less than 1.50 to 1.0.

At December 31, 2023, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions.

The following table sets forth information regarding debt obligations by component as of December 31, 2023 and 2022 (dollar amounts in thousands):

		At December 31, 2023				At December 31, 2022
	Applicable			Available				Available
	Interest	Outstanding		for		Outstanding		for
Debt Obligations	Rate (1)	Balance		Borrowing		Balance		Borrowing
Revolving line of credit	6.66%	$	302,250	$	97,750	$	130,000	$	270,000
Term loans, net of debt issue costs	2.74%		99,658		—		99,511		—
Senior unsecured notes, net of debt issue costs	4.20%		489,409		—		538,343		—
Total	4.87%	$	891,317	$	97,750	$	767,854	$	270,000

(1) Represents weighted average of interest rate as of December 31, 2023.

(2) Subsequent to December 31, 2023, we repaid $30,500 under our unsecured revolving line of credit. Accordingly, we have $271,750 outstanding and $128,250 available for borrowing under our unsecured revolving line of credit.

Our borrowings and repayments for the years ended December 31, 2023, 2022 and 2021 are as follows (in thousands):

	Year Ended December 31,
	2023					2022				2021
Debt Obligations		Borrowings		Repayments		Borrowings		Repayments		Borrowings		Repayments
Revolving line of credit	$	277,450	$	(105,200)	(1)	$	194,000	$	(174,900)	$	204,400	$	(183,400)
Term loans		—		—			—		—		100,000		—
Senior unsecured notes		—		(49,160)			75,000		(48,160)		—		(47,160)
Total	$	277,450	$	(154,360)		$	269,000	$	(223,060)	$	304,400	$	(230,560)

(1) Subsequent to December 31, 2023, we repaid $30,500 under our unsecured revolving line of credit. Accordingly, we have $271,750 outstanding and $128,250 available for borrowing under our unsecured revolving line of credit.

Scheduled Principal Payments. The following table represents our long-term contractual obligations (scheduled principal payments and amounts due at maturity) as of December 31, 2023, and excludes the effects of interest and debt issue costs (in thousands):

	Total			2024		2025			2026		2027		2028		Thereafter
Revolving line of credit	$	302,250	(1)	$	—	$	302,250	(2)	$	—	$	—	$	—	$	—
Term loans		100,000			—		50,000			50,000		—		—		—
Senior unsecured notes		490,660			49,160		49,500			51,500		54,500		55,000		231,000
	$	892,910		$	49,160	$	401,750		$	101,500	$	54,500	$	55,000	$	231,000

(1) Subsequent to December 31, 2023, we repaid $30,500 under our unsecured revolving line of credit. Accordingly, we have $271,750 outstanding and $128,250 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to December 31, 2023, we exercised our option to extend the maturity date of our Credit Agreement to November 19, 2026.