v3.26.1
Notes Payable
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Notes Payable Notes Payable
    The following table summarizes the components and significant terms of our indebtedness as of June 30, 2026 and December 31, 2025 (dollars in thousands):
 June 30, 2026December 31, 2025Margin Above SOFR
Interest Rate(1)
 
Contractual
Maturity Date
 
Unsecured and Secured Debt
Unsecured Debt:
Revolving Credit Facility$14,000 $— S+0.685 %
(2)
4.365 %
(3)
5/30/2029
(4)
$575M Exchangeable Senior Notes due 2027
575,000 575,000 n/a4.375 %3/15/2027
$300M Term Loan300,000 300,000 S+0.760 %
(2)
3.577 %
(5)
5/26/2027
$125M Senior Notes125,000 125,000 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 Notes25,000 25,000 n/a3.880 %7/16/2029
$400M Term Loan400,000 400,000 S+0.760 %
(2)
4.174 %
(6)
5/30/2030
$400M Senior Notes due 2030400,000 400,000 n/a2.125 %12/1/2030
$400M Senior Notes due 2031400,000 400,000 n/a2.150 %9/1/2031
$75M Series 2019B Senior Notes75,000 75,000 n/a4.030 %7/16/2034
Total Unsecured Debt$3,189,000 $3,175,000 
Secured Debt:   
 
 
 
$60M Term Loan(7)
60,000 60,000 S+1.250 %5.060 %
(7)
10/27/2026
(7)
701-751 Kingshill Place(8)
— 6,715 n/a3.900 %1/5/2026
13943-13955 Balboa Boulevard(9)
13,608 13,814 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)
3,646 3,688 n/a4.260 %7/1/2028
Gilbert/La Palma(9)
1,212 1,323 n/a5.125 %3/1/2031
7817 Woodley Avenue(9)
2,537 2,609 n/a4.140 %8/1/2039
Total Secured Debt$96,503 $103,649 
Total Unsecured and Secured Debt$3,285,503 $3,278,649 
Less: Unamortized premium/discount and debt issuance costs(11)
(21,779)(26,740)
Total $3,263,724 $3,251,909 
 
 
 
(1)Reflects the contractual interest rate under the terms of each loan as of June 30, 2026, and includes the effect of interest rate swaps that were effective as of June 30, 2026. 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 June 30, 2026, 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, based on our leverage ratio and investment grade ratings, less a sustainability-related interest rate adjustment of 0.04%. These loans are also subject to a 0% SOFR floor.
(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 June 30, 2026, the applicable facility fee is 0.125%, less a sustainability-related interest rate adjustment of 0.01%.
(4)The unsecured revolving credit facility has two six-month extensions available at our option, subject to certain terms and conditions.
(5)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 3.57725% after adding the applicable margin and sustainability-related rate adjustment.
(6)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 4.17375% after adding the applicable margin and sustainability-related rate adjustment.
(7)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. As of June 30, 2026, we have three one-year extension options available, subject to certain terms and conditions.
(8)On January 5, 2026, we paid in full the outstanding principal balance on this unsecured debt.
(9)Fixed monthly payments of interest and principal until maturity as follows: 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 June 30, 2026, and does not consider unexercised extension options available to us as noted in the table above (in thousands):
July 1, 2026 - December 31, 2026$60,441 
20271,019,078 
2028314,218 
2029614,427 
2030800,448 
Thereafter476,891 
Total$3,285,503 
Debt maturing over the next twelve months is expected to be addressed through refinancing, extensions, repayment with cash on hand and/or borrowings under our unsecured revolving credit facility.
Exchangeable Senior Notes
As of June 30, 2026, we had outstanding $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 the 2029 Exchangeable Notes) redeemed.
As of June 30, 2026 and December 31, 2025, the net carrying amount of the 2027 Exchangeable Notes was $571.9 million and $569.8 million, respectively, with unamortized debt discount and issuance costs of $3.1 million and $5.2 million, respectively. As of June 30, 2026 and December 31, 2025, the net carrying amount of the 2029 Exchangeable Notes was $568.0 million and $566.8 million, respectively, with unamortized debt discount and issuance costs of $7.0 million and $8.2 million, respectively.
Interest on the Exchangeable Notes is payable semiannually on March 15 and September 15 of each year. For the three and six months ended June 30, 2026, we recognized total interest expense on the Exchangeable Notes of $13.9 million and $27.7 million, respectively, with coupon interest of $12.2 million and $24.4 million, and amortization of debt discount and issuance costs of $1.7 million and $3.3 million, respectively. For the three and six months ended June 30, 2025, we recognized total interest expense of $13.8 million and $27.6 million, respectively, with coupon interest of $12.2 million and $24.4 million, and amortization of debt discount and issuance costs of $1.6 million and $3.2 million, respectively.
Prior to December 15, 2026 (in the case of the 2027 Exchangeable Notes) and December 15, 2028 (in the case of the 2029 Exchangeable Notes), noteholders may exchange their Exchangeable Notes only upon the occurrence of certain events. From and after those dates, noteholders may exchange their Exchangeable Notes at any time at their election until the close of business on the second scheduled trading day immediately preceding the applicable maturity date. 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, representing an initial exchange price of approximately $63.64 per share of our common stock.
We may not redeem the 2027 Exchangeable Notes prior to their maturity. The 2029 Exchangeable Notes may be redeemed, 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 preceding their maturity date, subject to satisfaction of certain conditions, including that the last reported sale price of our common stock exceeds 130% of the exchange price for a specified period. The redemption price will equal the principal amount of the 2029 Exchangeable Notes redeemed, plus accrued and unpaid interest, if any.
In connection with the issuance of 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 specified conditions under the registration rights agreement are not satisfied, we may be required to pay additional interest on the applicable series of Exchangeable Notes. We account for such potential additional interest as contingent obligations under ASC Subtopic 825-20: Financial Instruments - Registration Payment Arrangements and ASC Subtopic 450-20: Loss Contingencies. As payments of such additional interest were not probable as of June 30, 2026, no liability was recognized.
Fifth Amended and Restated Credit Agreement
As of June 30, 2026, under the Fifth Amended and Restated Credit Agreement (the “Credit Agreement”), we have a $1.25 billion unsecured revolving credit facility (the “Revolver”), a $300.0 million unsecured term loan facility (the “$300 Million Term Loan”) and a $400.0 million unsecured term loan facility (the “$400 Million Term Loan” and together with the $300 Million Term Loan, the “Term Facility”). 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. In January 2026, after certifying that our sustainability performance targets were met for 2025, the applicable margin decreased by 0.04% to 0.685% for the Revolver and to 0.760% for the Term Facility, and the credit facility fee decreased by 0.01% 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.
As of June 30, 2026, we had $14.0 million of borrowings outstanding under the Revolver and $4.6 million of outstanding letters of credit that reduced our borrowing capacity, leaving $1.231 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 5.000% Senior Notes due 2028, $400.0 million of 2.125% Senior Notes due 2030 and $400.0 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 & Poor’s Ratings Services (“S&P”), Moody’s Investors Services (“Moody’s”) or Fitch Ratings. Our credit ratings as of June 30, 2026, were BBB+ from S&P, BBB+ from Fitch Ratings and Baa2 from Moody’s.
    We were in compliance with all of our required quarterly financial debt covenants as of June 30, 2026.