Debt

A summary of the Company’s consolidated indebtedness is as follows (dollars in thousands):



	Interest Rate		Maturity Date at September 30, 2017	Carrying Value
	September 30, 2017	December 31, 2016	Maturity Date at September 30, 2017	September 30, 2017			December 31, 2016
Mortgages Payable
Core Fixed Rate	3.88%-5.89%	3.88%-5.89%	February 2024 - April 2035	$	180,259		$	234,875
Core Variable Rate - Swapped^(a)	1.71%-3.77%	1.71%-3.77%	June 2018 - June 2026	80,492			82,250
Total Core Mortgages Payable				260,751			317,125
Fund II Fixed Rate	1.00%-4.75%	1.00%-5.80%	October 2017 - May 2020	224,262			249,762
Fund II Variable Rate	LIBOR+0.79% -LIBOR+2.50%	LIBOR+0.62% -LIBOR+2.50%	December 2017 - November 2021	126,077			142,750
Fund II Variable Rate - Swapped^(a)	2.88%	2.88%	November 2021	19,616			19,779
Total Fund II Mortgages Payable				369,955			412,291
Fund III Variable Rate	Prime+0.50% -LIBOR+4.65%	Prime+0.50% -LIBOR+4.65%	March 2018 - December 2021	69,632			83,467
Fund IV Fixed Rate	3.40%-4.50%	3.40%-4.50%	October 2025-June 2026	10,503			10,503
Fund IV Variable Rate	LIBOR+1.70% -LIBOR+3.95%	LIBOR+1.70% - LIBOR+3.95%	October 2017 - April 2022	268,554			233,139
Fund IV Variable Rate - Swapped^(a)	1.78%	1.78%	May 2019 - April 2022	81,156			14,509
Total Fund IV Mortgages Payable				360,213			258,151
Net unamortized debt issuance costs				(15,555		)	(16,642		)
Unamortized premium				881			1,336
Total Mortgages Payable				$	1,045,877		$	1,055,728
Unsecured Notes Payable
Core Unsecured Term Loans	LIBOR+1.30% -LIBOR+1.60%	LIBOR+1.30% -LIBOR+1.60%	July 2020 - December 2022	$	26,459		$	51,194
Core Variable Rate Unsecured Term Loans - Swapped^(a)	1.24%-3.77%	1.24%-3.77%	July 2018 - March 2025	273,541			248,806
Total Core Unsecured Notes Payable				300,000			300,000
Fund II Unsecured Notes Payable	LIBOR+1.65%		September 2020	31,500			—
Fund IV Term Loan/Subscription Facility	LIBOR+1.65% -LIBOR+2.75%	LIBOR+1.65% -LIBOR+2.75%	October 2017- December 2017	54,920			134,636
Fund V Subscription Facility	LIBOR+1.60%	LIBOR+1.60%	May 2020	113,200			—
Net unamortized debt issuance costs				(1,650		)	(1,646		)
Total Unsecured Notes Payable				$	497,970		$	432,990
Unsecured Line of Credit
Core Unsecured Line of Credit	LIBOR+1.40%	LIBOR+1.40%	June 2020	$	59,000		$	—
Total Unsecured Line of Credit				$	59,000		$	—

Total Debt - Fixed Rate ^(b)				$	869,829		$	860,484
Total Debt - Variable Rate				749,342			645,186
Total Debt				1,619,171			1,505,670
Net unamortized debt issuance costs				(17,205		)	(18,288		)
Unamortized premium				881			1,336
Total Indebtedness				$	1,602,847		$	1,488,718

__________


(a)	At September 30, 2017, the stated rates ranged from LIBOR + 1.08% to LIBOR +1.90% for Core variable-rate debt; LIBOR + 0.79% to LIBOR +2.50% for Fund II variable-rate debt; PRIME + 0.50% to LIBOR +4.65% for Fund III variable-rate debt; LIBOR + 1.70% to LIBOR +3.95% for Fund IV variable-rate debt and LIBOR + 1.30% to LIBOR +1.60% for Core variable-rate unsecured notes.


(b)	Includes $454,805 and $365,343, respectively, of variable-rate debt that has been fixed with interest rate swap agreements as of the periods presented.

Mortgages Payable

During the nine months ended September 30, 2017, the Company obtained nine new non-recourse mortgages totaling $128.3 million with a weighted-average interest rate of LIBOR + 3.43% collateralized by nine properties, which mature between February 14, 2020 and April 1, 2022. The Company entered into interest rate swap contracts to effectively fix the variable portion of the interest rates of seven of these obligations with a notional value of $67.3 million at a weighted-average rate of 1.92%. During 2017, the Company repaid six mortgages in full, which had a total balance of $112.5 million and a weighted-average interest rate of 4.76%, and made scheduled principal payments of $5.8 million. At September 30, 2017 and December 31, 2016, the Company’s mortgages were collateralized by 45 and 39 properties, respectively, and the related tenant leases. Certain loans are cross-collateralized and contain cross-default provisions. The loan agreements contain customary representations, covenants and events of default. Certain loan agreements require the Company to comply with affirmative and negative covenants, including the maintenance of debt service coverage and leverage ratios. A portion of the Company’s variable-rate mortgage debt has been effectively fixed through certain cash flow hedge transactions (Note 8).

The mortgage loan related to Brandywine Holdings in the Company’s Core Portfolio amounted to $26.3 million and was in default at September 30, 2017 and December 31, 2016. This loan bears interest at 5.99%, excluding default interest of 5%, and is collateralized by a property, in which the Company holds a 22% controlling interest. In April 2017, the lender on this mortgage initiated a lawsuit against the Company for the full balance of the principal, accrued interest as well as penalties and fees aggregating approximately $31.0 million. The Company’s management believes that the mortgage is not recourse to the Company and that the suit is without merit.

In addition, at September 30, 2017, a mortgage loan in the amount of $14.3 million and collateralized by a Fund II property, was in default because its liquidity covenant had been breached.

See Note 15 for information about additional financing obtaining after September 30, 2017.

Unsecured Notes Payable

The Company completed the following transactions related to its unsecured notes payable during the nine months ended September 30, 2017:


•	The Company reduced its maximum commitment available on the Fund IV subscription line of credit from $100.0 million to $21.5 million. The balance was $20.4 million at September 30, 2017 and $94.5 million at December 31, 2016. Total available credit at September 30, 2017 and December 31, 2016 was $1.1 million and $5.5 million, respectively on this line.

•

Fund IV also has a $50.0 million bridge facility. The balance was $34.5 million at September 30, 2017 and $40.1 million at December 31, 2016. The Company was in compliance with the liquidity covenant for this facility at September 30, 2017, but was not in compliance at December 31, 2016. Total available credit at each of September 30, 2017 and December 31, 2016 was $0.0 on this facility. In October 2017, this facility was refinanced (Note 15).

•

The Company obtained a new Fund V subscription line in the amount of $150.0 million secured by Fund V’s unfunded capital commitments with an interest rate of LIBOR plus 160 basis points and maturing in May 2020. The Fund V subscription line is also guaranteed by the Operating Partnership. The outstanding balance was $113.2 million and total available credit was $36.8 million at September 30, 2017.

•

The Company obtained a new Fund II loan in the amount of $40.0 million secured by the real estate assets of City Point Phase II with an interest rate of LIBOR plus 140 basis points and maturing in September 2020. The Fund II loan is also guaranteed by the Company and the Operating Partnership. The outstanding balance was $31.5 million and total available credit was $8.5 million at September 30, 2017.

Unsecured Line of Credit

At September 30, 2017 and December 31, 2016, the Company had a total of $79.7 million and $147.5 million, respectively available under its unsecured line of credit. The Company completed the following transactions related to its unsecured line of credit during the nine months ended September 30, 2017:


•	In connection with the repayments of two secured mortgage notes payable, the Company drew down $59.0 million through September 30, 2017. The total available balance was $79.7 million reflecting $11.3 million of outstanding letters of credit as of September 30, 2017.

Scheduled Debt Principal Payments

The scheduled principal repayments of the Company’s consolidated indebtedness, as of September 30, 2017 are as follows (in thousands):



Year Ending December 31,
2017 (Remainder)	$	174,707
2018	88,308
2019	228,523
2020	573,807
2021	255,055
Thereafter	298,771
	1,619,171
Unamortized fair market value of assumed debt	881
Net unamortized debt issuance costs	(17,205		)
Total indebtedness	$	1,602,847

See Note 4 for information about liabilities of the Company’s unconsolidated affiliates.