v3.25.4
Notes Payable
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Notes Payable Notes Payable
The following table summarizes the components and significant terms of our indebtedness as of December 31, 2025 and 2024 (dollars in thousands):
 December 31, 2025December 31, 2024Margin Above SOFR
Interest Rate(1)
 
Contractual
Maturity Date
Unsecured and Secured Debt:
Unsecured Debt:
Revolving Credit Facility$— $— S+0.725 %
(2)
4.595 %
(3)
5/30/2029
(4)
$100M Senior Notes
— 100,000 n/a4.290 %
 
8/6/2025
(5)
$575M Exchangeable Senior Notes due 2027575,000 575,000 n/a4.375 %3/15/2027
$300M Term Loan300,000 300,000 S+0.800 %
(2)
3.617 %
(6)
5/26/2027
$125M Senior Notes
125,000 125,000 n/a3.930 %7/13/2027
$300M Senior Notes due 2028300,000 300,000 n/a5.000 %6/15/2028
$575M Exchangeable Senior Notes due 2029
575,000 575,000 n/a4.125 %3/15/2029
$25M Series 2019A Senior Notes
25,000 25,000 n/a3.880 %7/16/2029
$400M Term Loan400,000 400,000 S+0.800 %
(2)
4.214 %
(7)
5/30/2030
$400M Senior Notes due 2030400,000 400,000 n/a2.125 %12/1/2030
$400M Senior Notes due 2031
400,000 400,000 n/a2.150 %9/1/2031
$75M Series 2019B Senior Notes
75,000 75,000 n/a4.030 %7/16/2034
Total Unsecured Debt$3,175,000 $3,275,000 
Secured Debt:
$60M Term Loan(8)
60,000 60,000 S+1.250 %5.060 %
(8)
10/27/2026
(8)
701-751 Kingshill Place(9)
6,715 6,852 n/a3.900 %1/5/2026
13943-13955 Balboa Boulevard(9)
13,814 14,213 n/a3.930 %7/1/2027
2205 126th Street(10)
5,200 5,200 n/a3.910 %12/1/2027
2410-2420 Santa Fe Avenue(10)
10,300 10,300 n/a3.700 %1/1/2028
11832-11954 La Cienega Boulevard(9)
3,688 3,772 n/a4.260 %7/1/2028
Gilbert/La Palma(9)
1,323 1,538 n/a5.125 %3/1/2031
7817 Woodley Avenue(9)
2,609 2,747 n/a4.140 %8/1/2039
Total Secured Debt$103,649 $104,622 
Total Unsecured and Secured Debt$3,278,649 $3,379,622 
Less: Unamortized premium/discount and debt issuance costs(11)
(26,740)(33,660)
Total$3,251,909 $3,345,962 
(1)Reflects the contractual interest rate under the terms of each loan as of December 31, 2025 and includes the effect of interest rate swaps that were effective as of December 31, 2025. The interest rate is not adjusted to include the amortization of debt issuance costs or unamortized fair market value premiums and discounts.
(2)As of December 31, 2025, the interest rates on these loans are comprised of daily Secured Overnight Financing Rate (“SOFR”) for both the unsecured revolving credit facility and $400.0 million unsecured term loan, and 1-month term SOFR (“Term SOFR”) for the $300.0 million unsecured term loan, plus an applicable margin of 0.725% per annum for the unsecured revolving credit facility and 0.80% per annum for the $300.0 million and $400.0 million unsecured term loans, and a sustainability-related rate adjustment of zero. These loans are also subject to a 0% SOFR floor. In January 2026, the applicable margin decreased by 0.04% to 0.685% for the unsecured revolving credit facility and to 0.76% for the $400.0 million and $300.0 million unsecured term loans after certifying that our sustainability performance targets were met for 2025.
(3)The unsecured revolving credit facility is subject to an applicable facility fee which is calculated as a percentage of the total lenders’ commitment amount, regardless of usage. As of December 31, 2025, the applicable facility fee is 0.125% per annum with a sustainability-related rate adjustment of zero. In January 2026, the facility fee decreased by 0.01% to 0.115% after certifying that our sustainability performance targets for 2025 were met.
(4)The unsecured revolving credit facility has two six-month extensions available at our option, subject to certain terms and conditions.
(5)On August 6, 2025, we paid in full the outstanding principal balance on this unsecured debt.
(6)Term SOFR for our $300.0 million unsecured term loan has been swapped to a fixed rate of 2.81725% through May 26, 2027, resulting in an all-in fixed rate of 3.61725% after adding the applicable margin and sustainability-related rate adjustment.
(7)Daily SOFR for our $400.0 million unsecured term loan has been swapped to a fixed rate of 3.41375% through May 30, 2030, resulting in an all-in fixed rate of 4.21375% after adding the applicable margin and sustainability-related rate adjustment.
(8)The loan is secured by six properties and has interest-only payment terms bearing interest at Term SOFR increased by a 0.10% SOFR adjustment plus an applicable margin of 1.25% per annum. Term SOFR for this loan has been swapped to a fixed rate of 3.710% through July 30, 2026, resulting in an all-in fixed rate of 5.060% after adding the SOFR adjustment and applicable margin. On July 11, 2025, we exercised a one-year extension option, extending the maturity date of this loan to October 27, 2026. Subsequently, on September 2, 2025, we amended this loan to, among other changes, add two additional one-year extension options. As of December 31, 2025, we have three remaining one-year extension options available, subject to certain terms and conditions.
(9)Fixed monthly payments of interest and principal until maturity as follows: 701-751 Kingshill Place ($33,488), 13943-13955 Balboa Boulevard ($79,198), 11832-11954 La Cienega Boulevard ($20,194), Gilbert/La Palma ($24,008) and 7817 Woodley Avenue ($20,855).
(10)Fixed monthly payments of interest only.
(11)Excludes unamortized debt issuance costs related to our unsecured revolving credit facility, which are presented in the line item “Deferred loan costs, net” in the consolidated balance sheets.
Contractual Debt Maturities
The following table summarizes the contractual debt maturities and scheduled amortization payments, excluding debt premiums/discounts and debt issuance costs, as of December 31, 2025, and does not consider unexercised extension options available to us as noted in the table above (in thousands):
2026$67,587 
20271,019,078 
2028314,218 
2029600,427 
2030800,448 
Thereafter476,891 
Total$3,278,649 
Recent Activity
Exchangeable Senior Notes
In March 2024, we issued $575.0 million in aggregate principal amount of 4.375% exchangeable senior unsecured notes due 2027 (the “2027 Exchangeable Notes”) and $575.0 million in aggregate principal amount of 4.125% exchangeable senior unsecured notes due 2029 (the “2029 Exchangeable Notes” and together with the 2027 Exchangeable Notes, the “Exchangeable Notes”). The 2027 Exchangeable Notes will mature on March 15, 2027 and the 2029 Exchangeable Notes will mature on March 15, 2029, in each case unless earlier repurchased, exchanged or (in the case of 2029 Exchangeable Notes) redeemed. The net proceeds from the issuance, after deducting the initial purchasers’ discounts, underwriting commissions and other offering expenses, were approximately $563.1 million for the 2027 Exchangeable Notes and $563.1 million for the 2029 Exchangeable Notes. As of December 31, 2025 and December 31, 2024, the net carrying amount of the 2027 Exchangeable Notes was $569.8 million and $565.9 million, respectively, with unamortized debt discount and issuance costs of $5.2 million and $9.1 million, respectively. As of December 31, 2025 and December 31, 2024, the net carrying amount of the 2029 Exchangeable Notes was $566.8 million and $564.6 million, respectively, with unamortized debt discount and issuance costs of $8.2 million and $10.4 million, respectively.
Interest on the Exchangeable Notes is payable semiannually on March 15 and September 15 of each year beginning on September 15, 2024. For the year ended December 31, 2025, we recognized total interest expense on the Exchangeable Notes of $55.3 million, with coupon interest of $48.9 million, and amortization of debt discount and issuance costs of $6.4 million. For the
year ended December 31, 2024, we recognized total interest expense on the Exchangeable Notes of $41.7 million, with coupon interest of $37.1 million, and amortization of debt discount and issuance costs of $4.6 million.
Before December 15, 2026 (in the case of the 2027 Exchangeable Notes) or December 15, 2028 (in the case of the 2029 Exchangeable Notes), noteholders will have the right to exchange their notes only upon the occurrence of certain events. From and after December 15, 2026 (in the case of the 2027 Exchangeable Notes) or December 15, 2028 (in the case of the 2029 Exchangeable Notes), noteholders may exchange their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date of the applicable series of Exchangeable Notes. Exchanges will be settled by delivering cash up to the principal amount of the Exchangeable Notes exchanged, and in respect of the remainder of the exchanged value, if any, in excess thereof, in cash or in a combination of cash and shares of our common stock, at our option. The initial exchange rate is 15.7146 shares of our common stock per $1,000 principal amount of the Exchangeable Notes, which represents an initial exchange price of approximately $63.64 per share of our common stock.
We may not redeem the 2027 Exchangeable Notes at our option prior to their maturity. The 2029 Exchangeable Notes will be redeemable, in whole or in part (subject to certain limitations), for cash at our option at any time, and from time to time, on or after May 20, 2027 and on or before the 41st scheduled trading day immediately before the maturity date of the 2029 Exchangeable Notes, but only if the last reported sale price per share of our common stock exceeds 130% of the exchange price of the 2029 Exchangeable Notes for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the 2029 Exchangeable Notes to be redeemed, plus accrued and unpaid interest, if any.
If a fundamental change (e.g. change in control, delisting of our common stock or shareholders’ approval of liquidation or dissolution plan) occurs, then, subject to limited exception, noteholders may require us to repurchase their notes for cash at a repurchase price equal to the principal amount plus any accrued and unpaid interest. In addition, if a specific make-whole fundamental change occurs prior to the maturity date or if we issue a notice of redemption with respect to the 2029 Exchangeable Notes, the exchange rate will be increased, in certain circumstances by pre-defined amounts.
In connection with the offering for each series of Exchangeable Notes, we entered into a registration rights agreement pursuant to which we agreed to register the resale of the shares of our common stock, if any, deliverable upon exchange of the Exchangeable Notes. If certain conditions relating to our obligations under the registration rights agreement are not satisfied, then we will pay additional interest on the applicable series of Exchangeable Notes. We account for such additional interest amounts as contingent obligations in accordance with ASC Subtopic 825-20: Financial Instrument - Registration Payment Arrangements, which are measured separately in accordance with ASC Subtopic 450-20: Loss Contingencies. Because payment of such additional interest amounts was not probable as of December 31, 2025, we have not recognized a liability as of December 31, 2025.
Fifth Amended and Restated Credit Agreement    
On May 30, 2025, we amended our senior unsecured credit agreement by entering into the Fifth Amended and Restated Credit Agreement (the “Credit Agreement”). Prior to the amendment, the credit agreement was comprised of (i) a senior unsecured revolving credit facility (the “Revolver”) in the aggregate principal amount of $1.0 billion, which also allowed us to issue letters of credit up to an aggregate amount not to exceed $100.0 million, (ii) a $300.0 million unsecured term loan facility (the “$300 Million Term Loan”) and (iii) a $400.0 million unsecured term loan facility (the “$400 Million Term Loan” and together with the $300 Million Term Loan, the “Term Facility”). The Credit Agreement, among other changes, (i) increased the borrowing capacity under the Revolver from $1.00 billion to $1.25 billion, (ii) lowered the interest rate by eliminating the 0.10% SOFR adjustment that previously applied to both the Revolver and the $400 Million Term Loan, (iii) extended the maturity date of the Revolver from May 26, 2026 to May 30, 2029 (with two six-month extensions) and (iv) extended the maturity of the $400 Million Term Loan from July 18, 2025 to May 30, 2030. The interest rate and maturity date (May 26, 2027) of the $300 Million Term Loan remained unchanged.
On November 21, 2025, we further amended the Credit Agreement to lower the interest rate by eliminating the 0.10% SOFR adjustment that previously applied to the $300 Million Term Loan.
Subject to certain terms and conditions set forth in the Credit Agreement, we may request additional lender commitments and increase the size of the Credit Agreement by an additional $1.05 billion, which may be comprised of additional revolving commitments under the Revolver, an increase to the Term Facility, additional term loan tranches or any combination of the foregoing.
Interest on the Credit Agreement is generally to be paid based upon, at our option, either Term SOFR, daily SOFR or a base rate, plus an applicable margin based on our leverage ratio and debt ratings. The applicable margin for the Term Facility ranges from 0.80% to 1.60% per annum for SOFR-based loans and 0.00% to 0.60% per annum for base rate loans. The applicable margin for the Revolver ranges from 0.725% to 1.400% per annum for SOFR-based loans and letters of credit and 0.00% to 0.40% per annum for base rate loans. In addition to the interest payable on amounts outstanding under the Revolver, we are
required to pay an applicable credit facility fee, on each lender's commitment amount under the Revolver, regardless of usage. The applicable credit facility fee ranges from 0.125% to 0.300% per annum, depending on our leverage ratio and investment grade ratings.
In addition, the Credit Agreement also features a sustainability-linked pricing component that can periodically adjust the applicable margin by -0.04%, zero or 0.04% and adjust the applicable credit facility fee by -0.01%, zero or 0.01%, depending on our achievement of the annual sustainability performance metrics. During 2025, the sustainability-linked pricing adjustment was zero for both the applicable margin and credit facility fee. In January 2026, after certifying that our sustainability performance targets were met for 2025, the applicable margin decreased by 0.040% to 0.685% for the Revolver and to 0.760% for the Term Facility, and the credit facility fee decreased by 0.010% to 0.115%.
The Revolver and the Term Facility may be voluntarily prepaid in whole or in part at any time without premium or penalty. Amounts borrowed under the Term Facility and repaid or prepaid may not be reborrowed.
The Credit Agreement contains usual and customary events of default including defaults in the payment of principal, interest or fees, defaults in compliance with the covenants set forth in the Credit Agreement and other loan documentation, cross-defaults to certain other indebtedness, and bankruptcy and other insolvency defaults. If an event of default occurs and is continuing under the Credit Agreement, the unpaid principal amount of all outstanding loans, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable.
In connection with the amendment of the Credit Agreement, we recognized debt extinguishment and modification expenses of $0.3 million in the second quarter of 2025, which is comprised of a $0.2 million loss on extinguishment of debt from the write-off of unamortized debt issuance costs attributable to previous creditors in the Revolver that were not included in the Credit Agreement and $0.1 million of third-party fees associated with the modification of the $400 Million Term Loan.
As of December 31, 2025, we did not have any borrowings outstanding under the Revolver and had $4.6 million outstanding in letters of credit that reduced our borrowing capacity, leaving $1.245 billion available for future borrowings.
Debt Covenants
    The Credit Agreement, $60.0 million term loan facility (the “$60 Million Term Loan”), $125.0 million unsecured guaranteed senior notes (the “$125 Million Notes”) and $25.0 million unsecured guaranteed senior notes and $75.0 million unsecured guaranteed senior notes (together the “Series 2019A and 2019B Notes”) include a series of financial and other covenants that we must comply with. All financial ratios, metrics and terms used in the covenants below are defined in the applicable loan agreements and are tested on a quarterly basis.
•Maintaining a ratio of total indebtedness to total asset value of not more than 60%;
•For the Credit Agreement and $60 Million Term Loan, maintaining a ratio of secured debt to total asset value of not more than 45%;
•For the $125 Million Notes and Series 2019A and 2019B Notes (together the “Senior Notes”), maintaining a ratio of secured debt to total asset value of not more than 40%;
•For the Senior Notes, maintaining a ratio of total secured recourse debt to total asset value of not more than 15%;
•For the Senior Notes, maintaining a minimum tangible net worth of at least the sum of (i) $760,740,750, and (ii) an amount equal to at least 75% of the net equity proceeds received by the Company after September 30, 2016;
•Maintaining a ratio of adjusted EBITDA to fixed charges of at least 1.5 to 1.0;
•For the Credit Agreement and Senior Notes, maintaining a ratio of total unsecured debt to total unencumbered asset value of not more than 60%; and
•For the Credit Agreement and Senior Notes, maintaining a ratio of unencumbered NOI (as defined in each of the loan agreements) to unsecured interest expense of at least 1.75 to 1.0. 
The $300.0 million of 5.00% Senior Notes due 2028, $400.0 million of 2.125% Senior Notes due 2030 and $400 million of 2.150% Senior Notes due 2031 (together the “Registered Notes”) contain the following covenants. All financial ratios and terms used below are as defined in the applicable indentures and are tested on an annual basis.
•Maintaining a ratio of total indebtedness to total asset value of not more than 60%;
•Maintaining a ratio of secured debt to total asset value of not more than 40%;
•Maintaining a Debt Service Coverage Ratio of at least 1.5 to 1.0; and
•Maintaining a ratio of unencumbered assets to unsecured debt of at least 1.5 to 1.0.
    Subject to the terms of the Credit Agreement, $60 Million Term Loan, Senior Notes and Registered Notes, upon certain events of default, including, but not limited to, (i) a default in the payment of any principal or interest, (ii) a default in the payment of certain of our other indebtedness, and (iii) a default in compliance with the covenants set forth in the debt agreement, the principal and accrued and unpaid interest on the outstanding debt may be declared immediately due and payable at the option of the administrative agent, lenders, trustee and/or noteholders, as applicable, and in the event of bankruptcy and other insolvency defaults, the principal and accrued and unpaid interest on the outstanding debt will become immediately due and payable. In addition, we are required to maintain at all times a credit rating on the Senior Notes from either Standard and Poor’s Ratings Services (“S&P”), Moody’s Investors Services (“Moody’s”) or Fitch Ratings. Our credit ratings as of December 31, 2025, were BBB+ from S&P, BBB+ from Fitch Ratings and Baa2 from Moody’s.
We were in compliance with all of our required quarterly and annual financial debt covenants as of December 31, 2025.