Mortgages and Notes Payable

12 Months Ended

Dec. 31, 2016

The Company had the following mortgages and notes payable outstanding as of December 31, 2016 and December 31, 2015:



	December 31, 2016			December 31, 2015
Mortgages and notes payable	$	745,173		$	882,952
Unamortized debt issuance costs	(7,126		)	(10,309		)
	$	738,047		$	872,643

Interest rates, including imputed rates on mortgages and notes payable, ranged from 2.2% to 7.8% at December 31, 2016 and the mortgages and notes payable mature between 2017 and 2036. Interest rates, including imputed rates, ranged from 2.2% to 7.8% at December 31, 2015. The weighted-average interest rate at December 31, 2016 and 2015 was approximately 4.6% and 4.9%, respectively.

The Company has a $905,000 unsecured credit agreement with KeyBank National Association as agent. With lender approval, the Company can increase the size of the facility to an aggregate $1,810,000. A summary of the significant terms are as follows:



	Maturity Date	Current Interest Rate
$400,000 Revolving Credit Facility⁽¹⁾	08/2019	LIBOR + 1.00%
$250,000 Term Loan⁽²⁾⁽⁴⁾	08/2020	LIBOR + 1.10%
$255,000 Term Loan⁽³⁾⁽⁴⁾	01/2021	LIBOR + 1.10%


(1)	Maturity date can be extended to August 2020 at the Company's option. The interest rate ranges from LIBOR plus 0.85% to 1.55%. At December 31, 2016, the unsecured revolving credit facility had no amounts outstanding, $4,600 of letters of credit and availability of $395,400, subject to covenant compliance.


(2)	The interest rate ranges from LIBOR plus 0.90% to 1.75%. The Company previously entered into aggregate interest-rate swap agreements to fix the LIBOR component at a weighted-average rate of 1.09% through February 2018 on the $250,000 of outstanding LIBOR-based borrowings.


(3)	The interest rate ranges from LIBOR plus 0.90% to 1.75%. The Company previously entered into aggregate interest-rate swap agreements to fix the LIBOR component at a weighted-average rate of 1.42% through January 2019 on the $255,000 of outstanding LIBOR-based borrowings.


(4)	The aggregate unamortized debt issuance costs for the term loans were $3,907 and $4,924 as of December 31, 2016 and 2015 and respectively.

The unsecured revolving credit facility and the unsecured term loans are subject to financial covenants, which the Company was in compliance with at December 31, 2016.

Mortgages payable and secured loans are generally collateralized by real estate and the related leases. Certain mortgages payable have yield maintenance or defeasance requirements relating to any prepayments.

Scheduled principal and balloon payments for mortgages, notes payable, credit facility borrowings and term loans for the next five years and thereafter are as follows:



Year ending December 31,	Total
2017	$	92,731
2018	36,713
2019	110,448
2020	305,147
2021	295,465
Thereafter	409,669
	1,250,173
Unamortized debt discounts	(11,033		)
	$	1,239,140

Included in the Consolidated Statements of Operations, the Company recognized debt satisfaction gains (charges), net, excluding discontinued operations, of $(7), $4,128 and $(6,657) for the years ended December 31, 2016, 2015 and 2014, respectively, due to the satisfaction of mortgages and notes payable other than those disclosed elsewhere in these financial statements. In addition, the Company capitalized $4,933, $6,062 and $3,441 in interest, including discontinued operations, for the years ended 2016, 2015 and 2014, respectively.

Senior Notes, Convertible Notes and Trust Preferred Securities

The Company had the following Senior Notes outstanding as of December 31, 2016 and 2015:



Issue Date	December 31, 2016			December 31, 2015			Interest Rate		Maturity Date	Issue Price
May 2014	$	250,000		$	250,000		4.40	%	June 2024	99.883	%
June 2013	250,000			250,000			4.25	%	June 2023	99.026	%
	500,000			500,000
Unamortized debt discount	(1,780		)	(2,053		)
Unamortized debt issuance cost	(3,858		)	(4,421		)
	$	494,362		$	493,526

Each series of the Senior Notes is unsecured and pays interest semi-annually in arrears. The Company may redeem the notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium.

During 2010, the Company issued $115,000 aggregate principal amount of 6.00% Convertible Guaranteed Notes. The notes paid interest semi-annually in arrears and were scheduled to mature in January 2030. The notes were fully satisfied/converted in 2016 and at December 31, 2016, no such notes were outstanding. During 2016, 2015 and 2014, $12,400, $3,828 and $12,763 aggregate principal amount of the notes were converted for 1,892,269, 519,664 and 1,904,542 common shares and an aggregate cash payment of $672, $529 and $233 plus accrued and unpaid interest, respectively. The Company recognized aggregate debt satisfaction charges of $436, $476 and $2,436, during 2016, 2015 and 2014, respectively, relating to the conversions.

During 2007, the Company issued $200,000 unsecured original principal amount of Trust Preferred Securities. The Trust Preferred Securities, which are classified as debt, are due in 2037, were open for redemption at the Company's option commencing April 2012 and bear interest at a fixed rate of 6.804% through April 2017 and thereafter, at a variable rate of three month LIBOR plus 170 basis points through maturity. As of December 31, 2016 and 2015, there was $129,120 original principal amount of Trust Preferred Securities outstanding and $2,024 and $2,124, respectively, of unamortized debt issuance cost.

Scheduled principal payments for these debt instruments for the next five years and thereafter are as follows:



Year ending December 31,	Total
2017	$	—
2018	—
2019	—
2020	—
2021	—
Thereafter	629,120
	629,120
Unamortized debt discounts	(1,780		)
Unamortized debt issuance costs	(5,882		)
	$	621,458

LCIF [Member]

Debt Instrument [Line Items]

Mortgages and Notes Payable

Mortgages and Notes Payable and Co-Borrower Debt

The Partnership had the following mortgages and notes payable outstanding as of December 31, 2016 and 2015:



	December 31, 2016			December 31, 2015
Mortgages and notes payable	$	169,958		$	437,492
Unamortized debt issuance costs	(746		)	(5,893		)
	$	169,212		$	431,599

Interest rates, including imputed rates, ranged from 4.0% to 6.5% at December 31, 2016 and the mortgages and notes payable mature between 2019 and 2026. Interest rates, including imputed rates, ranged from 4.0% to 6.5% at December 31, 2015. The weighted-average interest rate at December 31, 2016 and 2015 was approximately 4.7%.

In 2015, the Partnership obtained $110,000 of non-recourse secured financing on an industrial facility in Richland, Washington. The debt bears interest at a fixed rate of 4.0% and matures in January 2026.

Lexington, and the Partnership as co-borrower, have a $905,000 unsecured credit agreement with KeyBank National Association as agent. With lender approval, Lexington can increase the size of the facility to an aggregate $1,810,000. A summary of the significant terms are as follows:



	Maturity Date	Current Interest Rate
$400,000 Revolving Credit Facility⁽¹⁾	08/2019	LIBOR + 1.00%
$250,000 Term Loan⁽²⁾	08/2020	LIBOR + 1.10%
$255,000 Term Loan⁽³⁾	01/2021	LIBOR + 1.10%


(1)	Maturity date can be extended to August 2020 at Lexington's option. The interest rate ranges from LIBOR plus 0.85% to 1.55%. At December 31, 2016, the unsecured revolving credit facility had no amounts outstanding, $4,600 of letters of credit and availability of $395,400 subject to covenant compliance.


(2)	The interest rate ranges from LIBOR plus 0.90% to 1.75%. Interest-rate swap agreements were previously entered into to fix the LIBOR component at a weighted-average rate of 1.09% through February 2018 on the $250,000 of outstanding LIBOR-based borrowings.


(3)	The interest rate ranges from LIBOR plus 0.90% to 1.75%. Interest-rate swap agreements were previously entered into to fix the LIBOR component at a weighted-average rate of 1.42% through January 2019 on the $255,000 of outstanding LIBOR-based borrowings.

The unsecured revolving credit facility and the unsecured term loans are subject to financial covenants, which Lexington was in compliance with at December 31, 2016.

In accordance with the guidance of ASU 2013-04, the Partnership recognizes a proportion of the outstanding amounts of the above mentioned term loans and revolving credit facility as it is a co-borrower with Lexington, as co-borrower debt in the accompanying balances sheets. In accordance with the Partnership’s partnership agreement, the Partnership is allocated a portion of these debts based on gross rental revenues, which represents its agreed to obligation. The Partnership's allocated co-borrower debt was $146,404 and $201,106 as of December 31, 2016 and 2015, respectively. Changes in co-borrower debt are recognized in partners’ capital in the accompanying consolidated statements of changes in partners’ capital.

Scheduled principal and balloon payments for mortgages and notes payable and co-borrower debt for the next five years and thereafter are as follows:



Year ending December 31,	Total
2017	$	1,054
2018	1,124
2019	32,548
2020	91,067
2021	82,506
Thereafter	108,063
	$	316,362
Unamortized debt issuance costs	(746		)
	$	315,616

Included in the Consolidated Statements of Operations, the Partnership recognized debt satisfaction charges, net of $33 and $357 for the years ended December 31, 2015, and 2014, respectively, due to the satisfaction of mortgages and notes payable. In addition, the Partnership capitalized $954, $152 and $60 in interest for the years ended 2016, 2015, and 2014, respectively.