Annual report pursuant to Section 13 and 15(d)

Mortgage Notes Payable

v2.4.0.6
Mortgage Notes Payable
12 Months Ended
Dec. 31, 2011
Notes Payable, Noncurrent [Abstract]  
Mortgage Notes Payable
MORTGAGE NOTES PAYABLE
We had outstanding mortgage notes payable, each collateralized by one or more buildings and related land from our portfolio, as follows (dollars in thousands):
 
 
 
 
 
 
December 31,
 
 
Properties
 
Assumption/Issuance Date (1)
 
Effective Interest Rate (2)
 
2011
 
2010
 
Maturity Date
Prosperity Medical Center
 
10/9/2003
 
5.36
%
 
$
31,169

 
$
31,886

 
5/1/2013
Prosperity Medical Center
 
10/9/2003
 
5.34
%
 
11,828

 
12,101

 
5/1/2013
Shady Grove Medical Village II
 
8/12/2004
 
6.98
%
 

 
9,375

 
12/1/2011
Frederick Crossing
 
3/23/2005
 
5.95
%
 
21,700

 
22,268

 
11/1/2012
9707 Medical Center Drive (3)
 
4/13/2006
 
5.32
%
 
4,780

 
4,955

 
7/1/2028
Plumtree Medical Center
 
6/22/2006
 
5.68
%
 
4,419

 
4,512

 
3/11/2013
15005 Shady Grove Road
 
7/12/2006
 
5.73
%
 
7,974

 
8,149

 
3/11/2013
West Gude Drive
 
8/25/2006
 
5.86
%
 
30,761

 
31,486

 
2/11/2013
Woodholme Medical Office Center
 
6/1/2007
 
5.29
%
 
19,954

 
20,285

 
11/1/2015
Ashburn Farm Office Park
 
6/1/2007
 
5.56
%
 
2,438

 
2,556

 
5/31/2025
Ashburn Farm Office Park
 
6/1/2007
 
5.69
%
 
2,159

 
2,285

 
7/31/2023
3801 Connecticut Avenue, Walker House and Bethesda Hill (4)
 
5/29/2008
 
5.71
%
 
81,029

 
81,029

 
6/1/2017
2445 M Street (5)
 
12/2/2008
 
5.62
%
 
95,593

 
94,339

 
1/6/2017
Kenmore Apartments
 
2/2/2009
 
5.37
%
 
36,097

 
36,634

 
3/1/2019
Olney Village Center
 
8/30/2011
 
4.94
%
 
23,873

 

 
11/1/2023
John Marshall II
 
9/15/2011
 
5.79
%
 
53,936

 

 
5/6/2016
 
 
 
 
 
 
$
427,710

 
$
361,860

 
 
(1) Each of these mortgages was assumed with the acquisition of the collateralized properties, except for the mortgage notes secured by 3801 Connecticut Avenue, Walker House, Bethesda Hill and Kenmore Apartments, which were originally executed by WRIT. We record mortgages assumed in an acquisition at fair value, and balances presented include any recorded premiums or discounts.
(2) Yield on the assumption/issuance date, including the effects of any premiums, discounts or fair value adjustments on the notes.
(3) The mortgage bears a set interest rate through June 30, 2012, at which time the rate will be reset based on the Moody's Long-term Corporate Bond Yield Average, but never lower than 5.0% per annum. The interest rate will be reset annually thereafter for the duration of the note. Principal and interest are payable monthly until July 1, 2028, at which time all unpaid principal and interest are payable in full. During the first 90 days of 2013, the lender has the option to elect to accelerate the maturity date of the note to July 1, 2013. For the remainder of 2013, we have the right to prepay the note without any prepayment penalties.
(4) Interest only is payable monthly until the maturity date, which can be extended for one year upon which the interest rate is reset on June 1, 2016. At maturity on June 1, 2017, all unpaid principal and interest are payable in full.
(5) Interest only is payable monthly until the maturity date upon which all unpaid principal and interest are payable in full.
Except as noted above, principal and interest are payable monthly until the maturity date, upon which all unpaid principal and interest are payable in full.

Total carrying amount of the above mortgaged properties was $678.9 million and $570.5 million at December 31, 2011 and 2010, respectively.

On September 1, 2011, we repaid without penalty the remaining $9.1 million of principal on the mortgage note secured by Shady Grove Medical Village II.

On October 5, 2011, we entered into an amendment to the purchase and sale agreement for 6100 Columbia Park Road and Dulles Business Park , under which we agreed to seek prepayment of the mortgage notes secured by Dulles Business Park prior to closing the sale. Under the terms of the amendment, if we prepaid the mortgage notes prior to November 1, 2011, then the sales price would be increased by $875,000 in order to partially offset the penalties incurred by us for the prepayment of the mortgage notes. On October 7, 2011, we prepaid the remaining $17.5 million of principal on the mortgage notes, incurring prepayment penalties of $1.0 million. Because Dulles Business Park was sold (see note 3 to the consolidated financial statements), these mortgage notes are included in "Other liabilities related to properties sold or held for sale" on the consolidated balance sheets as of December 31, 2010.     

Scheduled principal payments during the five years subsequent to December 31, 2011 and thereafter are as follows (in thousands):
2012
$
27,000

2013
87,580

2014
3,724

2015
22,390

2016
134,943

Thereafter
156,548

 
432,185

Net discounts/premiums
(4,475
)
Total
$
427,710