v3.25.1
Debt
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Debt Disclosure Debt
The following table summarizes the Company’s outstanding indebtedness, including borrowings under the Company’s unsecured credit facility, unsecured term loans, unsecured notes, and mortgage note as of March 31, 2025 and December 31, 2024.

Indebtedness (dollars in thousands)March 31, 2025December 31, 2024
Interest Rate(1)(2)
    Maturity Date
Prepayment Terms(3) 
Unsecured credit facility:
Unsecured Credit Facility(4)
$512,000 $409,000 Term SOFR + 0.875%September 7, 2029i
Total unsecured credit facility512,000 409,000    
Unsecured term loans:    
Unsecured Term Loan G300,000 300,000 1.80 %February 5, 2026i
Unsecured Term Loan A150,000 150,000 2.16 %March 15, 2027i
Unsecured Term Loan H187,500 187,500 3.35 %January 25, 2028i
Unsecured Term Loan I187,500 187,500 3.51 %January 25, 2028i
Unsecured Term Loan F(5)
200,000 200,000 4.83 %March 23, 2029i
Total unsecured term loans1,025,000 1,025,000 
Total unamortized deferred financing fees and debt issuance costs(2,815)(3,152)
Total carrying value unsecured term loans, net1,022,185 1,021,848    
Unsecured notes:    
Series D Unsecured Notes— 100,000 4.32 %February 20, 2025ii
Series G Unsecured Notes75,000 75,000 4.10 %June 13, 2025ii
Series B Unsecured Notes50,000 50,000 4.98 %July 1, 2026ii
Series C Unsecured Notes80,000 80,000 4.42 %December 30, 2026ii
Series E Unsecured Notes20,000 20,000 4.42 %February 20, 2027ii
Series H Unsecured Notes100,000 100,000 4.27 %June 13, 2028ii
Series L Unsecured Notes175,000 175,000 6.05 %May 28, 2029ii
Series M Unsecured Notes125,000 125,000 6.17 %May 28, 2031ii
Series I Unsecured Notes275,000 275,000 2.80 %September 29, 2031ii
Series K Unsecured Notes400,000 400,000 4.12 %June 28, 2032ii
Series J Unsecured Notes50,000 50,000 2.95 %September 28, 2033ii
Series N Unsecured Notes150,000 150,000 6.30 %May 28, 2034ii
Total unsecured notes1,500,000 1,600,000 

Total unamortized deferred financing fees and debt issuance costs(5,697)(5,908)

Total carrying value unsecured notes, net1,494,303 1,594,092  

  

Mortgage note (secured debt):  

  
United of Omaha Life Insurance Company4,267 4,322 3.71 %October 1, 2039ii
Total mortgage note4,267 4,322  
Net unamortized fair market value discount(125)(127) 
Total carrying value mortgage note, net4,142 4,195  
Total / weighted average interest rate(6)
$3,032,630 $3,029,135 4.13 %
(1)Interest rate as of March 31, 2025. At March 31, 2025, the one-month Term Secured Overnight Financing Rate (“Term SOFR”) and Daily Simple Secured Overnight Financing Rate (“Daily SOFR”) was 4.3194% and 4.3223%, respectively. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts. The spread over the
applicable rate for the Company’s unsecured credit facility and unsecured term loans is based on the Company’s debt rating and leverage ratio, as defined in the respective loan agreements.
(2)The unsecured credit facility has a stated interest rate of one-month Term SOFR plus a 0.10% adjustment and a spread of 0.775%. The unsecured term loans have a stated interest rate of one-month Term SOFR plus a 0.10% adjustment and a spread of 0.85%. As of March 31, 2025, one-month Term SOFR for the Unsecured Term Loans A, G, H, and I was swapped to a fixed rate of 1.31%, 0.95%, 2.50%, and 2.66%, respectively (which includes the 0.10% adjustment). The Unsecured Term Loan F provides for the election of Daily SOFR, and effective January 15, 2025, Daily SOFR was swapped to a fixed rate of 3.98% (including the 0.10% adjustment).
(3)Prepayment terms consist of (i) pre-payable with no penalty; and (ii) pre-payable with penalty.
(4)The capacity of the unsecured credit facility is $1.0 billion. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately $9.4 million and $10.1 million are included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, respectively. The initial maturity date is September 8, 2028, or such later date which may be extended pursuant to two six-month extension options exercisable by the Company in its discretion upon advance written notice. Exercise of each six-month option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension; (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date; and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions. The Company is required to pay a facility fee on the aggregate commitment amount (currently $1.0 billion) at a rate per annum of 0.1% to 0.3%, depending on the Company’s debt rating, as defined in the credit agreement. The facility fee is due and payable quarterly.
(5)The initial maturity date of the Unsecured Term Loan F is March 25, 2027, or such later date which may be extended pursuant to two one-year extension options exercisable by the Company in its discretion upon advance written notice. Exercise of each one-year option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension; (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date; and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions.
(6)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $1,025.0 million of debt and is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts.

The aggregate undrawn nominal commitment on the unsecured credit facility as of March 31, 2025 was approximately $483.8 million, including issued letters of credit. The Company’s actual borrowing capacity at any given point in time may be less or restricted to a maximum amount based on the Company’s debt covenant compliance. Total accrued interest for the Company’s indebtedness was approximately $24.5 million and $13.7 million as of March 31, 2025 and December 31, 2024, respectively, and is included in accounts payable, accrued expenses and other liabilities on the accompanying Consolidated Balance Sheets.

The following table summarizes the costs included in interest expense related to the Company’s debt arrangements on the accompanying Consolidated Statement of Operations for the three months ended March 31, 2025 and 2024.

Three months ended March 31,
Costs Included in Interest Expense (in thousands)20252024
Amortization of deferred financing fees and debt issuance costs and fair market value discount$1,301 $984 
Facility, unused, and other fees$435 $439 

Debt Activity

On February 20, 2025, the Company redeemed in full at maturity the $100.0 million in aggregate principal amount of the Series D Unsecured Notes with a fixed interest rate of 4.32%.

Financial Covenant Considerations

The Company was in compliance with all such applicable restrictions and financial and other covenants as of March 31, 2025 and December 31, 2024 related to its unsecured credit facility, unsecured term loans, unsecured notes, and mortgage note. The real estate net book value of the property that is collateral for the Company’s debt arrangements was approximately $7.2 million and $7.3 million at March 31, 2025 and December 31, 2024, respectively, and is limited to senior, property-level secured debt financing arrangements.
Fair Value of Debt

The following table summarizes the aggregate principal amount outstanding under the Company’s debt arrangements and the corresponding estimate of fair value as of March 31, 2025 and December 31, 2024.

 March 31, 2025December 31, 2024
Indebtedness (in thousands)Principal OutstandingFair ValuePrincipal OutstandingFair Value
Unsecured credit facility$512,000 $512,000 $409,000 $409,000 
Unsecured term loans1,025,000 1,025,000 1,025,000 1,025,000 
Unsecured notes1,500,000 1,423,658 1,600,000 1,490,667 
Mortgage note4,267 3,340 4,322 3,366 
Total principal amount3,041,267 $2,963,998 3,038,322 $2,928,033 
Net unamortized fair market value discount(125)(127)
Total unamortized deferred financing fees and debt issuance costs (8,512)(9,060)
Total carrying value$3,032,630 $3,029,135 

The applicable fair value guidance establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value of the Company’s debt is based on Level 3 inputs.