Mortgage Loans | Mortgage Loans Brookfield DTLA’s debt is as follows (in thousands, except percentage amounts): Contractual Maturity Date Principal Amount as of Interest Rate September 30, 2017 December 31, 2016 Floating-Rate Debt Variable-Rate Loans: Wells Fargo Center–North Tower (1) 4/9/2019 3.49 % $ 370,000 $ — Wells Fargo Center–North Tower (2) 4/9/2019 6.49 % 55,000 — Wells Fargo Center–North Tower (3) 4/9/2019 8.24 % 45,000 — Wells Fargo Center–South Tower (4) 12/6/2018 4.93 % 250,000 250,000 777 Tower (5) 11/1/2018 3.42 % 220,000 220,000 Figueroa at 7th (6) 12/10/2017 3.41 % 35,000 35,000 Total variable-rate loans 975,000 505,000 Variable-Rate Swapped to Fixed-Rate Loan: EY Plaza (7) 11/27/2020 3.93 % 177,858 180,859 Total floating-rate debt 1,152,858 685,859 Fixed-Rate Debt: BOA Plaza 9/1/2024 4.05 % 400,000 400,000 Gas Company Tower 8/6/2021 3.47 % 319,000 319,000 Gas Company Tower 8/6/2021 6.50 % 131,000 131,000 Total fixed-rate debt 850,000 850,000 Debt Refinanced: Wells Fargo Center–North Tower — 550,000 Total debt 2,002,858 2,085,859 Less: unamortized discounts and debt issuance costs 11,874 9,055 Total debt, net $ 1,990,984 $ 2,076,804 __________ (1) This loan bears interest at LIBOR plus 2.25% . As required by the loan agreement, we have entered into an interest rate cap agreement that limits the LIBOR portion of the interest rate to 2.75% . Brookfield DTLA has three options to extend the maturity date of the loan, each for a period of one year, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). (2) This loan bears interest at LIBOR plus 5.25% . As required by the loan agreement, we have entered into an interest rate cap agreement that limits the LIBOR portion of the interest rate to 2.75% . Brookfield DTLA has three options to extend the maturity date of the loan, each for a period of one year, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). (3) This loan bears interest at LIBOR plus 7.00% . As required by the loan agreement, we have entered into an interest rate cap agreement that limits the LIBOR portion of the interest rate to 2.75% . Brookfield DTLA has three options to extend the maturity date of the loan, each for a period of one year, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). (4) This loan bears interest at LIBOR plus 3.69% . As required by the loan agreement, we have entered into an interest rate cap agreement that limits the LIBOR portion of the interest rate to 3.00% . Brookfield DTLA has three options to extend the maturity date of the loan, each for a period of one year, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). As of September 30, 2017 , a maximum future advance amount of $20.0 million is available under this loan that can be drawn by the Company to fund approved leasing costs (as defined in the underlying loan agreement), including tenant improvements, leasing commissions and capital expenditures. (5) This loan bears interest at LIBOR plus 2.18% . As required by the loan agreement, we have entered into an interest rate cap agreement that limits the LIBOR portion of the interest rate to 5.75% . Brookfield DTLA has two options to extend the maturity date of the loan, each for a period of one year, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). (6) This loan bears interest at LIBOR plus 2.25% . On November 2, 2017 , Brookfield DTLA extended the maturity date of this loan until January 8, 2018 . After this extension, the Company has two options to extend the maturity date of this loan, the first for a period of eight months and the second for a period of 12 months, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). See Note 14 “Subsequent Event.” (7) This loan bears interest at LIBOR plus 1.75% . As required by the loan agreement, we have entered into an interest rate swap agreement to hedge this loan, which effectively fixes the LIBOR portion of the interest rate at 2.178% . The effective interest rate of 3.93% includes interest on the swap. Debt Refinanced On April 5, 2017 , Brookfield DTLA refinanced the $550.0 million mortgage loan secured by Wells Fargo Center–North Tower. In connection with the refinancing, the Company repaid $80.0 million of principal and incurred transaction costs totaling $7.4 million . During April 2017, the Company received an $82.0 million cash contribution from Brookfield DTLA Holdings that was used to pay for costs associated with the refinancing of Wells Fargo Center–North Tower. The new $470.0 million loan is comprised of a $370.0 million mortgage loan, a $55.0 million mezzanine loan and a $45.0 million mezzanine loan, each of which bears interest at variable rates equal to LIBOR plus 2.25% , 5.25% and 7.00% , respectively, and require the payment of interest-only until maturity. As required by the mortgage and mezzanine loan agreements, on April 5, 2017 the Company entered into interest rate cap agreements with a total notional amount of $470.0 million that limit the LIBOR portion of the interest rates to 2.75% . The mortgage and mezzanine loans mature on April 9, 2019 . Brookfield DTLA has three options to extend the maturity date of the loans, each for a period of one year, subject to meeting certain debt yield ratios (as specified in the mortgage and mezzanine loan agreements). The mortgage and mezzanine loans can be prepaid, in whole or in part, with prepayment penalties (as defined in the underlying loan agreements) until July 9, 2018 after which the loans can be repaid without penalty. A voluntary prepayment of the mortgage or mezzanine loans requires a simultaneous pro-rata prepayment of all loans encumbering this property. Debt Maturities As Brookfield DTLA’s debt matures, principal payment obligations present significant future cash requirements. As of September 30, 2017 , our debt to be repaid during the remainder of 2017 , the next four years and thereafter is as follows (in thousands): 2017 (1) $ 36,025 2018 474,233 2019 474,449 2020 168,151 2021 450,000 Thereafter 400,000 $ 2,002,858 __________ (1) On November 2, 2017 , Brookfield DTLA extended the maturity date of the $35.0 million mortgage loan secured by Figueroa at 7th from December 10, 2017 until January 8, 2018 . See Note 14 “Subsequent Event.” As of September 30, 2017 , $343.9 million of our debt may be prepaid without penalty, $400.0 million may be defeased (as defined in the underlying loan agreement), and $1,259.0 million may be prepaid with prepayment penalties. Debt Extension— On August 14, 2017 , Brookfield DTLA extended the maturity date of the $35.0 million mortgage loan secured by Figueroa at 7th until December 10, 2017 . Then on November 2, 2017 , Brookfield DTLA extended the maturity date of this loan until January 8, 2018 . After the second extension, the Company has two options to extend the maturity date of this loan, the first for a period of eight months and the second for a period of 12 months, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). The Company plans to refinance this loan on or prior to January 8, 2018 and does not expect to make a principal paydown when the loan is refinanced. See Note 14 “Subsequent Event.” Non-Recourse Carve Out Guarantees All of Brookfield DTLA’s $2.0 billion of mortgage debt is subject to “non-recourse carve out” guarantees that expire upon elimination of the underlying loan obligations. In connection with all of these loans, Brookfield DTLA entered into “non-recourse carve out” guarantees, which provide for these otherwise non-recourse loans to become partially or fully recourse against Brookfield DTLA Holdings or one of its subsidiaries, if certain triggering events (as defined in the loan agreements) occur. Debt Reporting Pursuant to the terms of certain of our mortgage loan agreements, Brookfield DTLA is required to report a debt service coverage ratio (“DSCR”) calculated using the formulas specified in the underlying loan agreements. We have submitted the required reports to the lenders for the measurement periods ended September 30, 2017 and were in compliance with the amounts required by the loan agreements. Pursuant to the terms of the EY Plaza and Figueroa at 7th mortgage loan agreements, we are required to provide annual audited financial statements of Brookfield DTLA Holdings to the lenders or agents. The receipt of any opinion other than an “unqualified” audit opinion on our annual audited financial statements is an event of default under the loan agreements for the properties listed above. If an event of default occurs, the lenders have the right to pursue the remedies contained in the loan documents, including acceleration of all or a portion of the debt and foreclosure. |