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Debt
12 Months Ended
Dec. 31, 2020
Debt Disclosure [Abstract]  
Debt

Note 8 —Debt

Revolving Credit Facility

     On December 16, 2020, we entered into a credit agreement with PNC Bank. The credit agreement provides for a new $150.0 million secured credit facility, a $20.0 million swingline loan sub-facility and a $30.0 million letter of credit sub-facility. We can request incremental commitments under the credit agreement up to an aggregate principal amount of $300.0 million. The credit facility expires on December 2023, but can be extended, at our option, by up to two twelve-month periods, subject to the satisfaction of certain events and covenant metrics. The revolving loans (other than the swingline) will bear interest, at our option, at a per annum rate equal to (a) LIBOR plus a margin of 2.00% or (b) a base rate plus a margin of 1.00%. Swingline loans made under the Revolving Credit Facility will bear interest at a per annum rate equal to the base rate plus a margin of 1.00%. The base rate is defined as a fluctuating per annum rate of interest equal to the highest of (x) the overnight bank funding rate as reported by the Federal Reserve Bank of New York, plus 0.5%, (y) PNC Bank, National Association’s prime rate and (z) the daily LIBOR Rate plus 1.00%. If the LIBOR Rate determined under any referenced method would be less than .25%, such rate shall be deemed .25%.  Aimco may terminate or, from time to time, reduce the aggregate amount of commitments.

     As of December 31, 2020, we had no outstanding balance related to the credit facility, the swingline sub-facility or the letter of credit Sub-facility. Total debt issuance costs of approximately $1.9 million have been deferred and are presented within other assets, net in our consolidated balance sheets. Under our revolving secured credit facility, we are required to maintain a fixed charge coverage ratio of 1.25x, minimum adjusted tangible net worth of $625.0 million, and maximum leverage of 60% as defined in the credit agreement, among other customary covenants. We are currently in compliance with these covenants.

Notes Payable to AIR

On December 14, 2020, our subsidiary, Aimco JO Intermediate Holdings LLC (“Aimco JO”) entered into two notes aggregating to $534.1 million (the “Notes Payable to AIR” or “Notes”) in exchange for an equity interest in James-Oxford Limited Partnership (“James Oxford”) a consolidated subsidiary of Aimco that indirectly owns a portfolio of consolidated real estate assets. The Notes are secured by a pledge of the equity interests in James Oxford, however, James Oxford’s assets secure existing senior loans of $215.4 million as of December 31, 2020. The Notes mature on January 31, 2024 and bear interest at 5.2%, with accrued interest payable quarterly on January 1, April 1, July 1 and October 1, commencing on April 1, 2021. For the year ended December 31, 2020, we recognized interest expense of $1.3 million associated with the Notes Payable to AIR, which is included in interest expense and due to affiliates on the consolidated statements of operations and consolidated balance sheets, respectively.  

Upon a disposition, consolidation, or similar event or transaction, Aimco JO is obligated to prepay the Notes in an amount equal to the net cash proceeds received in connection with such transaction or casualty event.  Any such prepayment shall be accompanied by accrued and unpaid interest and a make-whole amount representing all remaining unpaid interest over the term of the Notes. However, if after giving effect to such transaction or casualty event, the fair market value of all real estate assets owned by James Oxford and its subsidiaries, less senior secured indebtedness (e.g., nonrecourse property debt), exceeds the then-outstanding principal balance of the Notes, we have the option to reinvest the net cash proceeds within 180 days of such transaction or casualty event by acquiring, leasing, constructing, or improving real property useful in the business of Aimco JO or its subsidiaries that we believe in good faith will enhance or create value. We are not otherwise permitted to prepay the Notes prior to the maturity date.  

The Notes Payable to AIR are senior secured obligations of Aimco JO and rank senior to all other senior obligations of Aimco JO to the extent of the value of the underlying collateral and rank pari passu with all other senior unsubordinated obligations of Aimco JO to the extent the amount of such obligations exceed the value of the underlying collateral. The Notes are not guaranteed and as a result, recourse is limited to Aimco JO, its assets and the underlying collateral pledged to secure Aimco JO’s obligations under the Notes. The Notes also contain customary representations, warranties, non-financial covenants and events of default.  

Upton Construction Loan

On December 23, 2020, our Upton Place joint venture entered into a construction loan with Bank OZK for up to $174.2 million, which was undrawn at December 31, 2020.  The construction loan is secured by the 99-year leasehold interest in the development site and by improvements to be constructed on the development site. Interest will accrue on the construction loan only when the funds are drawn upon. Funds drawn upon will bear interest at a rate equal to one month Libor (“Libor”) plus 450 basis points subject to a minimum all-in per annum interest rate of 4.75%. The initial term of the construction loan is fifty-four months, beginning December 23, 2020. The Upton Place joint venture has the option to extend the term for two additional periods of one year each, subject to the satisfaction of certain events and covenant metrics.

Total debt issuance costs of approximately $7.5 million have been deferred and are presented within other assets, net in our consolidated balance sheets.

Property-Level Debt

We finance apartment communities in our portfolio primarily using property-level, non-recourse, long-dated, fixed-rate, amortizing debt. The following table summarizes non-recourse property debt as of December 31, 2020 and 2019 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

Outstanding Balance

as of December 31,

 

 

Latest

Maturity Date

 

Interest Rate

Range

 

 

Weighted-Average Interest Rate

 

 

2020

 

 

2019

 

Fixed-rate property debt

November 22, 2032

 

1.00% to 4.08%

 

 

3.38%

 

 

$

394,510

 

 

$

438,886

 

Variable-rate property debt

December 31, 2023

 

1.34%

 

 

1.34%

 

 

 

55,000

 

 

 

55,000

 

Total non-recourse property debt

 

 

 

 

 

 

 

 

 

 

$

449,510

 

 

$

493,886

 

Assumed debt fair value adjustment,

   net of accumulated amortization

 

 

 

 

 

 

 

 

 

 

 

1,850

 

 

 

2,153

 

Debt issuance costs, net of

   accumulated amortization

 

 

 

 

 

 

 

 

 

 

 

(3,393

)

 

 

(3,401

)

Non-recourse property debt, net

 

 

 

 

 

 

 

 

 

 

$

447,967

 

 

$

492,638

 

Principal and interest on our non-recourse property debt are generally payable monthly. As of December 31, 2020, our property debt was secured by 11 apartment communities. These debt instruments contain no financial covenants.

As of December 31, 2020, the scheduled principal amortization and maturity payments for the non-recourse property debt were as follows (in thousands):

 

Amortization

 

 

Maturities

 

 

Total

 

2021

$

8,648

 

 

$

 

 

$

8,648

 

2022

 

9,087

 

 

 

15,773

 

 

 

24,860

 

2023

 

9,144

 

 

 

55,000

 

 

 

64,144

 

2024

 

7,099

 

 

 

81,940

 

 

 

89,039

 

2025

 

7,361

 

 

 

 

 

 

7,361

 

Thereafter

 

17,363

 

 

 

238,095

 

 

 

255,458

 

   Total

$

58,702

 

 

$

390,808

 

 

$

449,510