v3.26.1
Debt
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Debt

4. Debt

Mortgage Debt

 

The following table contains summary information concerning the mortgage debt of the Company as of March 31, 2026 (dollars in thousands):

 

Operating Properties

 

Type

 

Term (months)

 

Outstanding
Principal

 

 

Interest Rate (1)

 

Maturity Date

Residences at West Place

 

Fixed

 

120

 

$

33,817

 

 

4.24%

 

10/1/2028

Arbors of Brentwood

 

Floating

 

84

 

 

39,977

 

 

4.74%

 

10/1/2031

Avant at Pembroke Pines

 

Floating

 

84

 

 

248,185

 

 

4.74%

 

10/1/2031

Bella Vista

 

Floating

 

84

 

 

37,400

 

 

4.74%

 

10/1/2031

Brandywine I & II

 

Floating

 

84

 

 

59,526

 

 

4.74%

 

10/1/2031

Cornerstone

 

Floating

 

84

 

 

45,815

 

 

4.74%

 

10/1/2031

Estates on Maryland

 

Floating

 

84

 

 

37,345

 

 

4.74%

 

10/1/2031

High House at Cary

 

Floating

 

84

 

 

32,478

 

 

4.74%

 

10/1/2031

Residences at Glenview Reserve

 

Floating

 

84

 

 

33,271

 

 

4.74%

 

10/1/2031

Sabal Palm at Lake Buena Vista

 

Floating

 

84

 

 

56,220

 

 

4.74%

 

10/1/2031

Six Forks Station

 

Floating

 

84

 

 

30,430

 

 

4.74%

 

10/1/2031

Summers Landing

 

Floating

 

84

 

 

14,135

 

 

4.74%

 

10/1/2031

The Adair

 

Floating

 

84

 

 

33,229

 

 

4.74%

 

10/1/2031

The Enclave

 

Floating

 

84

 

 

33,440

 

 

4.74%

 

10/1/2031

The Heritage

 

Floating

 

84

 

 

29,810

 

 

4.74%

 

10/1/2031

The Venue on Camelback

 

Floating

 

84

 

 

36,465

 

 

4.74%

 

10/1/2031

The Verandas at Lake Norman

 

Floating

 

84

 

 

30,113

 

 

4.74%

 

10/1/2031

Versailles II

 

Floating

 

84

 

 

15,706

 

 

4.74%

 

10/1/2031

Arbors on Forest Ridge

 

Floating

 

84

 

 

17,307

 

 

4.74%

 

12/1/2031

Atera Apartments

 

Floating

 

84

 

 

38,555

 

 

4.74%

 

12/1/2031

Bella Solara

 

Floating

 

84

 

 

37,772

 

 

4.74%

 

12/1/2031

Bloom

 

Floating

 

84

 

 

60,848

 

 

4.74%

 

12/1/2031

Courtney Cove

 

Floating

 

84

 

 

31,596

 

 

4.74%

 

12/1/2031

Creekside at Matthews

 

Floating

 

84

 

 

28,703

 

 

4.74%

 

12/1/2031

Cutter's Point

 

Floating

 

84

 

 

18,994

 

 

4.74%

 

12/1/2031

Fairways at San Marcos

 

Floating

 

84

 

 

55,056

 

 

4.74%

 

12/1/2031

Madera Point

 

Floating

 

84

 

 

29,676

 

 

4.74%

 

12/1/2031

Parc500

 

Floating

 

84

 

 

30,012

 

 

4.74%

 

12/1/2031

Rockledge Apartments

 

Floating

 

84

 

 

78,444

 

 

4.74%

 

12/1/2031

Seasons 704 Apartments

 

Floating

 

84

 

 

33,960

 

 

4.74%

 

12/1/2031

The Preserve at Terrell Mill

 

Floating

 

84

 

 

74,341

 

 

4.74%

 

12/1/2031

The Summit at Sabal Park

 

Floating

 

84

 

 

26,735

 

 

4.74%

 

12/1/2031

Torreyana Apartments

 

Floating

 

84

 

 

43,153

 

 

4.74%

 

12/1/2031

Venue at 8651

 

Floating

 

84

 

 

24,620

 

 

4.74%

 

12/1/2031

Versailles

 

Floating

 

84

 

 

26,108

 

 

4.74%

 

12/1/2031

Sedona at Lone Mountain

 

Floating

 

84

 

 

40,287

 

 

4.88%

 

2/1/2033

 

 

 

 

 

 

$

1,543,529

 

 

 

 

 

Fair market value adjustment

 

 

 

 

 

 

265

 

(2)

 

 

 

Deferred financing costs, net of accumulated amortization of $8,472

 

 

 

 

 

 

(33,393

)

 

 

 

 

 

 

 

 

 

 

$

1,510,401

 

 

 

 

 

 

(1)
Interest rate is based on a reference rate plus an applicable margin, except for fixed rate mortgage debt. The reference rate used in our Portfolio is 30-Day Average Secured Overnight Financing Rate (“SOFR”). As of March 31, 2026, SOFR was 3.65%.

 

(2)
The Company reflected a valuation adjustment on its fixed rate debt for Residences at West Place to adjust it to fair market value on its respective date of acquisition for the difference between the fair value and the assumed principal amount of debt. The difference is amortized into interest expense over the remaining terms of the mortgages.

The weighted average interest rate of the Company’s mortgage indebtedness was 4.73% as of March 31, 2026 and 4.86% as of December 31, 2025. As of March 31, 2026, the adjusted weighted average interest rate of the Company’s mortgage indebtedness was 3.30% which excludes the effect of interest rate caps. For purposes of calculating the adjusted weighted average interest rate of the outstanding mortgage indebtedness, the Company has included the weighted average fixed rate of 1.36% for its combined $0.9 billion notional amount of interest rate swap agreements, which effectively fix the interest rate on $0.9 billion of the Company’s floating rate mortgage debt (see Note 5).

Each of the Company’s mortgages is a non-recourse obligation subject to customary provisions. The loan agreements contain customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants

contained in the documents evidencing the loan, defaults in payments under any other security instrument covering any part of the property, whether junior or senior to the loan, and bankruptcy or other insolvency events. As of March 31, 2026 and December 31, 2025, the Company believes it is in compliance with all provisions.

Credit Facility

The following table contains summary information concerning the Company's credit facility as of March 31, 2026, (dollars in thousands):

 

 

 

Type

 

Term (months)

 

 

Outstanding
Principal

 

 

Interest Rate (1)

 

Maturity Date

Credit Facility

 

Floating

 

 

36

 

 

$

57,000

 

 

5.66%

 

6/30/2028

Deferred financing costs, net of accumulated amortization of $569

 

 

 

 

 

 

 

(1,708

)

 

 

 

 

 

 

 

 

 

 

$

55,292

 

 

 

 

 

 

(1) Interest rate is based on Term SOFR plus an applicable margin. Term SOFR as of March 31, 2026 was 3.66%.

 

On March 25, 2022, the Company entered into a loan modification agreement by and among the Company, the OP, Truist Bank and the Lenders party thereto, which modified the Company’s credit agreement, dated as of June 30, 2021 (as amended and supplemented, the “Corporate Credit Facility”). On February 28, 2025, the Company agreed to reduce the available borrowing on the Corporate Credit Facility by $250.0 million. The Corporate Credit Facility matured on June 30, 2025 with respect to the revolving commitments. As of March 31, 2026 and December 31, 2025, the Company had $0.0 million and $0.0 million, respectively, available for borrowing under the Corporate Credit Facility.

 

On July 11, 2025, the Company, through the OP, entered into a $200.0 million revolving credit facility with J.P. Morgan Chase Bank, N.A. and the lenders thereto from time to time (the "Credit Facility"). The Credit Facility may be increased by up to an additional $200.0 million if the lenders agree to increase their commitments. The Credit Facility will mature on June 30, 2028, unless the Company exercises its option to extend for a one-year term upon satisfaction of certain criteria and payment of an extension fee of 0.15% of the aggregate amount outstanding under the Credit Facility. On December 9, 2025, the Company drew $90.0 million on the Credit Facility and on February 3, 2026 the Company made a principal payment of $33.0 million. As of March 31, 2026, the Company had $141.0 million available for borrowing under the Credit Facility, $57.0 million in aggregate principal outstanding on the Credit Facility and a $2.0 million letter of credit outstanding under the Credit Facility.

 

The Credit Facility is guaranteed by the Company and the obligations under the Credit Facility are, subject to some exceptions, secured by a security interest in the proceeds of all equity offerings and other capital events by the Company, the OP or their subsidiaries and an equity pledge of each subsidiary of the OP that owns an interest in a mortgaged property.

Advances under the Credit Facility accrue interest at a per annum rate equal to, at the Company’s election, either (i) the daily SOFR plus a margin of 1.50% to 2.25%, depending on the Company’s total leverage ratio in the immediately preceding quarter, (ii) term SOFR for the interest period plus a margin of 1.50% to 2.25%, depending on the Company’s total leverage ratio in the immediately preceding quarter, or (iii) a base rate determined according to the highest of (a) the prime rate, (b) the federal funds rate plus 0.5%, or (c) the one month term SOFR plus 1.0%, plus a margin of 0.50% to 1.25%, depending on the Company’s total leverage ratio in the immediately preceding quarter.

A commitment fee at a rate of 0.20% or 0.30%, depending on the average daily revolving commitment utilization percentage for the calendar quarter, applies to unutilized borrowing capacity under the Credit Facility.

 

The Credit Facility contains representations and warranties, affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type, including covenants setting a maximum total leverage ratio and payout ratio and a minimum fixed charge coverage ratio, minimum tangible net worth, debt yield and cash reserve. If an event of default occurs, the lenders may terminate the commitments under the Credit Facility and require the immediate repayment of all outstanding borrowings and the cash collateralization of all outstanding letters of credit under the Credit Facility. As of March 31, 2026, the Company believes it is compliant with all provisions of the Credit Facility.

 

Deferred Financing Costs

Upon repayment of or in conjunction with a material change in the terms of the underlying debt agreement, any unamortized costs are charged to loss on extinguishment of debt and modification costs. For the three months ended March 31, 2026 and 2025, amortization of deferred financing costs of approximately $1.7 million and $1.6 million, respectively, is included in interest expense on the consolidated statements of operations and comprehensive loss.

Schedule of Debt Maturities

The aggregate scheduled maturities, including amortizing principal payments, of total debt for the next five calendar years subsequent to March 31, 2026 are as follows (in thousands):

 

 

 

Operating
Properties

 

 

Credit Facility

 

Total

 

2026

 

$

—

 

 

$

—

 

$

—

 

2027

 

 

—

 

 

 

—

 

 

—

 

2028

 

 

33,817

 

 

 

57,000

 

 

90,817

 

2029

 

 

 

 

 

—

 

 

—

 

2030

 

 

—

 

 

 

—

 

 

—

 

Thereafter

 

 

1,509,712

 

 

 

—

 

 

1,509,712

 

Total

 

$

1,543,529

 

 

$

57,000

 

$

1,600,529