Credit Facilities |
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| Credit Facilities | Note 6. Credit Facilities
The following table summarizes the Company's credit facilities as of June 30, 2026 and December 31, 2025, respectively:
KeyBank Credit Facilities
The Company is a party to a credit agreement with KeyBank National Association ("KeyBank") as agent and lender. Prior to January 15, 2026, the KeyBank credit agreement provided a revolving credit facility with an aggregate commitment amount of $100 million, maturing on January 16, 2026. On January 15, 2026, the Company entered into an amended and restated credit agreement with KeyBank (the "A&R Credit Agreement"), which amended and restated the previous agreement with KeyBank. The A&R Credit Agreement provides for borrowings in the initial amount of $150 million of senior secured facilities (the “2026 KeyBank Credit Facility”), consisting of (i) a $150 million revolving line of credit (the “Revolver"), (ii) a term loan with no initial amount outstanding or committed (“KeyBank Term Loan A”), and subsequently in the amount designated upon the exercise of the accordion provision described below, and (iii) a term loan with no initial amount outstanding or committed (“KeyBank Term Loan B” and together with KeyBank Term Loan A, the “KeyBank Term Loans”), and subsequently in the amount designated upon the exercise of the accordion. So long as no default or event of default has occurred, the Company may increase the aggregate amount of the 2026 KeyBank Credit Facility to a maximum aggregate size of $500 million. Such increase may be allocated to (i) the then-existing revolving line of credit commitment, (ii) the initial KeyBank Term Loan A commitment (or, once the initial KeyBank Term Loan A commitment is provided, to the then-existing KeyBank Term Loan A commitment), (iii) the initial KeyBank Term Loan B commitment (or, once the initial KeyBank Term Loan B commitment is provided, to the then-existing KeyBank Term Loan B commitment), or (iv) any combination thereof satisfactory to KeyBank and applicable lenders. The Revolver matures on March 30, 2029, with the option for a 12-month extension upon satisfaction of certain conditions. The KeyBank Term Loans mature on the date selected by the Company and agreed to by KeyBank and applicable lenders, provided that in no event shall such maturity date occur earlier than the maturity date of the Revolver or the maturity date of any then-established KeyBank Term Loans.
Borrowings under the Revolver bear interest at floating rates based on the daily Secured Overnight Financing Rate ("SOFR") plus an applicable margin depending on the then-current leverage ratio as defined in the A&R Credit Agreement, which is 1.75% if the Company’s leverage ratio is less than 50% and 1.85% if the Company’s leverage ratio is equal to or greater than 50% (in each case a decrease from the applicable margin of 2.00% in the prior KeyBank credit agreement). Monthly interest payments are required on the outstanding balance. As of June 30, 2026 and 2025, the weighted average interest rate on the borrowings under the Revolver was 5.39% and 6.42%, respectively.
The Company pays an unused facility fee of either 0.20% or 0.25% per annum (depending on the amount of the unused borrowing capacity), payable quarterly. During the three months ended June 30, 2026 and 2025, we paid approximately $62,000 and $12,000 of unused commitment fees, respectively. During the six months ended June 30, 2026 and 2025, we paid approximately $104,000 and $39,000 of unused commitment fees, respectively.
Borrowings under the KeyBank credit agreements are secured by the ownership interest in certain real estate assets owned by the Company. The KeyBank credit agreements imposed certain customary financial and other covenants, including limitations on permitted investments and distributions. We were in compliance with all debt covenants under the KeyBank credit agreements as of June 30, 2026 and December 31, 2025.
Thrivent Term Loan
On September 11, 2025, Sealy Gardner Avenue, LLC, Sealy South Green Road, LLC, Sealy Commercial Drive II, LLC, Sealy Pederson Road, LLC, Sealy Crossroads L, LLC, Sealy Stateline K, LLC, and Sealy Northpoint One, LLC (collectively, the "Borrowers"), each a Georgia limited liability company and a wholly owned subsidiary of the Company, entered into a loan agreement (the "Thrivent Loan Agreement") and a promissory note (the "Thrivent Promissory Note") with Thrivent Financial for Lutherans ("Thrivent") for a 5-year term loan in the amount of $105.2 million (the "Thrivent Term Loan"). The proceeds from the Thrivent Term Loan, net of lenders fees and expenses, were used to pay off the then-outstanding $76.5 million balance under the KeyBank credit facility and for general corporate purposes.
The outstanding principal balance of the Thrivent Term Loan bears a fixed interest rate at 5.39% per annum. Interest for the period from September 11, 2025 to September 30, 2025 in the amount of $315,000 was prepaid on September 11, 2025. Subsequently, an interest-only payment of $473,000 is due on the first day of each month starting November 1, 2025. The Thrivent Term Loan matures on October 1, 2030. Prepayment in full is allowed upon payment of a Reinvestment Charge (as defined in the Thrivent Promissory Note) if prepaid on or before April 1, 2030 and without payment of a Reinvestment Charge if prepaid after April 1, 2030.
The Thrivent Term Loan is secured by, among other things, first-lien deeds of trust and mortgages encumbering seven properties owned by the Borrowers and is guaranteed by the OP.
Construction Loan
Through its investment in the IDV JV, the Company is party to a loan agreement with Cadence Bank for a 3-year construction loan with a principal amount of up to $10.8 million (the "Construction Loan"). Proceeds from this loan are used to finance the development and construction of a 164,600 square-foot industrial building in Houston, Texas. The initial construction loan matures on December 5, 2028, with two 12-month extension options available.
Outstanding principal on this loan as of June 30, 2026 was approximately $4.3 million. Borrowings under this loan agreement bear interest at floating rates based on 1-month SOFR plus a margin of 2.5%. As of June 30, 2026, the interest rate on borrowings was 6.13%. As of June 30, 2026, approximately $34,000 of interest on the outstanding construction loan balance and approximately $65,000 of financing costs were capitalized as work in progress real estate asset.
Deferred Financing Costs
Deferred financing costs related to the A&R Credit Agreement were approximately $1.6 million (paid in January 2026) and are amortized using the straight-line method over 3.2 years (the term of the 2026 KeyBank Credit Facility). Deferred financing costs related to the previous KeyBank credit agreement had been fully amortized when we entered into the A&R Credit Agreement and written off. Deferred financing costs for the KeyBank credit agreements are presented as a deferred asset on our consolidated balance sheets, net of accumulated amortization.
Deferred financing costs related to the Thrivent Term Loan were approximately $1.7 million (paid in September 2025), and are amortized using the effective interest method over the term of the loan.
During the three and six months ended June 30, 2026 and 2025, we recognized the following amortization expense related to the KeyBank credit facility and Thrivent Term loan:
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