What changed in this filing

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Item 7. Management’s Discussion and Analysis

2021-02-11 compared with 2020-02-10 · 389 added, 248 removed, 290 unchanged (69% of the section changed)

12 unchanged sentences

We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for 53 consecutive years.

Summary Financial Information

The following table includes select financial information that is helpful in understanding the trends in financial condition and the results of operations discussed throughout this Item 7.

Financial Statements and Supplementary Data.”

Year Ended December 31,

2020 2019 2018

(In thousands, except per share data and ratios)

Operating Data:

Rental income $ 832,171 $ 932,738 $ 912,287

Property operating income(1) $ 545,332 $ 637,030 $ 627,566

Gain on sale of real estate, net of tax $ 98,117 $ 116,393 $ 11,915

Operating income $ 289,524 $ 470,911 $ 361,636

Net income available for common shareholders $ 123,664 $ 345,824 $ 233,865

Net cash provided by operating activities $ 369,929 $ 461,919 $ 516,688

Net cash used in investing activities $ (368,383) $ (316,532) $ (192,247)

Net cash provided by (used in) financing activities $ 661,736 $ (100,105) $ (241,309)

Earnings per common share, diluted:

Net income available to common shareholders $ 1.62 $ 4.61 $ 3.18

Dividends declared per common share $ 4.22 $ 4.14 $ 4.04

Funds from operations available to common shareholders (2) $ 333,849 $ 465,819 $ 461,777

Funds from operations available for common shareholders, per diluted share (2) $ 4.38 $ 6.17 $ 6.23

EBITDAre(3) $ 501,813 $ 599,567 $ 595,558

Ratio of EBITDAre to combined fixed charges and preferred share dividends(3)(4) 2.7x 4.2x 4.2x

As of December 31,

2020 2019 2018

(In thousands)

Balance Sheet Data:

Real estate, at cost $ 8,582,870 $ 8,298,132 $ 7,819,472

Total assets $ 7,607,624 $ 6,794,992 $ 6,289,644

Total debt $ 4,291,375 $ 3,356,594 $ 3,229,204

Total shareholders’ equity $ 2,548,747 $ 2,636,132 $ 2,467,330

Number of common shares outstanding 76,727 75,541 74,250

(1) Property operating income is a non-GAAP measure.

See "Results of Operations" in this Item 7.

for further discussion.

(2) Funds from operations "FFO" is a supplemental non-GAAP measure.

See "Liquidity and Capital Resources" in this Item 7.

for further discussion.

(3) EBITDA for Real Estate ("EBITDAre") is a non-GAAP measure that NAREIT defines as:

net income computed in accordance with GAAP plus net interest expense, income tax expense, depreciation and amortization, gain or loss on sale of real estate, impairments of real estate, and adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates.

We calculate EBITDAre consistent with the NAREIT definition.

As EBITDA is a widely known and understood measure of performance, management believes EBITDAre represents an additional non-GAAP performance measure, independent of a company's capital structure that will provide investors with a uniform basis to measure the enterprise value of a company.

EBITDAre also approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP.

The reconciliation of net income to EBITDAre for the periods presented is as follows:

2020 2019 2018

(In thousands)

Net income $ 135,888 $ 360,542 $ 249,026

Interest expense 136,289 109,623 110,154

Other interest income (1,894) (1,266) (942)

Early extinguishment of debt 11,179 — —

(Benefit) provision for income tax (194) 772 1,521

Depreciation and amortization 255,027 239,758 244,245

Gain on sale of real estate (98,117) (116,779) (13,560)

Impairment charge 57,218 — —

Adjustments of EBITDAre of unconsolidated affiliates 6,417 6,917 5,114

EBITDAre $ 501,813 $ 599,567 $ 595,558

(4) Fixed charges consist of interest on borrowed funds (including capitalized interest), amortization of debt discount/ premiums and debt costs, costs related to the early extinguishment of debt, and the portion of rent expense representing an interest factor.

Excluding the $11.2 million early extinguishment of debt charge from fixed charges in 2020, the ratio of EBITDAre to combined fixed charges and preferred share dividends is 2.9x.

Excluding the $11.9 million charge related to the buyout of the Kmart lease at Assembly Square Marketplace in 2019, our ratio of EBITDAre to combined fixed charges and preferred share dividends remained 4.2x.

Impacts of COVID-19 Pandemic

We continue to monitor and address risks related to the COVID-19 pandemic.

In March 2020, the World Health Organization characterized COVID-19 as a global pandemic and in response to the rapid spread of the virus, state, and local governments issued orders and recommendations to attempt to reduce the further spread of the disease.

Such orders included shelter-in-place orders, travel restrictions, limitations on public gatherings, school closures, social distancing requirements and the closure of all but critical and essential businesses and services.

These orders required closure of all of our corporate offices as non-essential businesses.

Except for those employees who were critical to providing the necessary day-to-day property management functions required to keep our properties open and operating for essential businesses such as grocery stores and drug stores, and a few employees who were needed to carry out critical corporate functions, we transitioned our entire workforce to remote work in March 2020.

Although some of our corporate offices have reopened with capacity limitations, approximately 75% of our workforce continues to work remotely on a regular basis.

We have not laid off, furloughed, or terminated any employees nor have we modified the compensation of any or our employees as a result of COVID-19, and the transition to a largely remote workforce has not had any material adverse impact on our financial reporting systems, our internal controls, or disclosure controls and procedures.

The government imposed restrictions also required a significant number of tenants who do business in our properties, but were considered non-essential, to close their operations or to significantly limit the amount of business they are able to conduct in their stores.

These closures and restrictions have impacted the tenants’ ability to timely pay rent as required under our leases and also caused many tenants to close their business permanently.

As a result, our cash flow and results of operations in 2020 were materially adversely impacted and our vacancy increased above historical levels.

Although virtually all of our leases required the tenants to pay rent even while they were not operating, we entered into numerous agreements to abate, defer and/or restructure tenant rent payments for varying periods of time, all with the objective of collecting as much cash as reasonably possible and maintaining occupancy to the maximum extent.

We believe those actions will position many of our tenants to be able to return to payment of contractual rent as soon as possible after the impacts from the pandemic have subsided.

Given the impact to our cash flow caused by tenants not timely paying contractual rent, we took actions to improve our financial position and maximize our liquidity.

Those actions included raising $1.1 billion in May 2020 through a $400.0 million term loan and the issuance of $700.0 million of senior unsecured notes, amending the covenants on our revolving credit facility to provide us operating flexibility during the expected period during which our cash flow will be impacted, and raising an additional $400.0 million of senior unsecured notes in October 2020.

Throughout the last three quarters of 2020, we maintained levels of cash significantly in excess of the cash balances we have historically maintained which has adversely impacted our financial results;

however, we believe that such action was prudent to position us with what we expect to be sufficient liquidity to allow us to continue fully operating until our operating revenues return to more typical levels.

As of December 31, 2020, there is no outstanding balance on our $1.0 billion revolving credit facility, and we have cash and cash equivalents of $798.3 million.

Given the adverse impact on our cash flow, we did not commence any significant new capital projects during 2020 and we stopped, at least temporarily, portions of our capital spend that could be stopped.

We did, however, continue investing in a number of our larger projects which were in the middle of construction and could not be stopped without causing material adverse financial impact to the company.

Additional discussion of the impact of COVID-19 on our results in 2020 and long-term operations can be found throughout Item 7 and Item 1A .

Risk Factors.

Corporate Responsibility

We actively endeavor to operate and develop our properties in a sustainable, responsible, and effective manner with the objective being to drive long-term growth and aid in value creation for our shareholders, tenants, employees, and local communities.

Our development activities have been heavily focused on owning, developing and operating properties that are certified under the U.S.

Green Building Council’s® (“USGBC”) Leadership in Energy and Environmental Design™ (LEED®) rating system which serves as a third-party verification that a building or community was designed and built to mitigate its environmental footprint.

We currently have 15 LEED certified buildings and our Pike & Rose project has achieved LEED for Neighborhood Development Stage 3 Gold certification.

The COVID-19 pandemic has also increased our focus on owning, developing and operating healthier buildings.

To that end, our new corporate headquarters space at our 909 Rose Avenue building has earned a Fitwel certification developed by the U.S.

Centers for Disease Control and Prevention (CDC) together with the General Services Administration (GSA).

This certification assesses a building’s impact on seven distinct categories related to overall health and well-being.

These development efforts earned us the Sector Leader Development designation in 2020 from the Global Real Estate Environmental Sustainability Benchmark (“GRESB”) and enabled us to issue our first green bond in 2020, a $400.0 million offering that will be supported by certain of our LEED gold and silver certified buildings.

See Note 5 to the consolidated financial statements.

We are also committed to implementing sustainable business practices at our operating properties that focus on energy efficiency, water conservation and waste minimization.

As an example, under our solar program that we started in 2012, we have installed on-site solar systems at 25 of our properties with a capacity of over 13 MW and we anticipate adding solar installations at several more of our properties over the next few years to further our ability to source energy from renewable sources.

Our current capacity placed us in the top 5 among real estate companies for onsite capacity in the Solar Energy Industry Association’s annual Solar Means Business Report.

We are also actively upgrading lighting at our properties with energy efficient LED lighting and installing electric vehicle car charging stations in numerous properties throughout our portfolio.

Currently, we are evaluating the risks presented by climate change to help us better understand potential actions we could take to help mitigate our portfolio’s environmental footprint while protecting our long-term investments.

We are also highly committed to our employees and fostering a work environment that promotes growth, development and personal well-being.

Our four core values are accountability, excellence, innovation and integrity and we seek to attract and retain talented professionals who embrace those values.

All of our efforts with respect to corporate responsibility are overseen by our Board of Trustees.

Critical Accounting Policies

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Actual results could differ from these estimates.

A discussion of possible risks which may

affect these estimates is included in “Item 1A.

A discussion of possible risks which may affect these estimates is included in “Item 1A.

Risk Factors” of this report.

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Revenue Recognition and Accounts Receivable

Policy beginning January 1, 2019, with our adoption of Accounting Standards Codification (ASC) 842, "Leases"

Our leases with our tenants are classified as operating leases.

When collection of substantially all lease payments during the lease term is considered probable, the lease qualifies for accrual accounting.

Lease payments are recognized on a straight-line basis from when the tenant controls the space through the term of the related lease.

Lease payments are recognized on a straight-line

basis from the point in time when the tenant controls the space through the term of the related lease.

Variable lease payments relating to percentage rent are recognized at the end of the lease year or earlier if we have determined the required sales level is achieved.

Real estate tax and other cost reimbursements are recognized on an accrual basis over the periods in which the related expenditures are incurred.

Many of our leases contain tenant options that enable the tenant to extend the term of the lease at expiration at pre-established rental rates that often include fixed rent increases, consumer price index adjustments or other market rate adjustments from the prior base rent.

For a tenant to terminate its lease agreement prior to the end of the agreed term, we may require that they pay a fee to cancel the lease agreement.

Lease termination fees for which the tenant has relinquished control of the space are generally recognized on the termination date.

Lease termination fees are generally recognized on the termination date if the tenant has relinquished control of the space.

When a lease is terminated early but the tenant continues to control the space under a modified lease agreement, the lease termination fee is generally recognized evenly over the remaining term of the modified lease agreement.

Lease concessions (unrelated to the COVID-19 pandemic) are evaluated to determine whether the concession represents a modification of the original lease contract.

Modifications generally result in a reassessment of the lease term and lease classification, and remeasurement of lease payments received.

Remeasured lease payments are recognized on a straight-line basis over the remaining term of the modified lease contract.

In April 2020, the Financial Accounting Standards Board ("FASB") issued interpretive guidance relating to the accounting for lease concessions provided as a result of the COVID-19 pandemic that allows entities to treat the concession as if it was a part of the existing contract instead of applying lease modification accounting.

This guidance is only applicable to the COVID-19 pandemic related lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee.

We have elected this option relating to qualifying rent deferral and rent abatement agreements.

For qualifying lease modifications with rent deferrals, this results in no change to our revenue recognition but an increase in the lease receivable balance until the deferred rent has been repaid.

For qualifying lease modifications that include rent abatement concessions, this results in a direct reduction of rental income in the current period.

As of December 31, 2020, we have entered into rent deferral agreements and rent abatement agreements related to the COVID-19 pandemic representing approximately $36 million and $35 million, respectively, of rent otherwise owed during the year ended December 31, 2020, and continue negotiations with other tenants.

When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received.

Determining the probability of collection of substantially all lease payments during lease term requires judgment.

This determination is impacted by numerous factors including our assessment of the tenant’s credit worthiness, economic conditions, our historical experience with the tenant and tenants operating in the same industry, and the length of the lease term.

Determining the probability of collection of substantially all lease payments during a lease term requires significant judgment.

This determination is impacted by numerous factors including our assessment of the tenant’s credit worthiness, economic conditions, tenant sales productivity in that location, historical experience with the tenant and tenants operating in the same industry, future prospects for the tenant and the industry in which it operates, and the length of the lease term.

If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in rental income.

For example, in the event that our collectability determinations were not accurate and we were required to write off additional receivables equaling 1% of rental income, our rental income and net income would decrease by $9.3 million .

Policy prior to January 1, 2019

Prior to January 1, 2019, management estimates of collectability were considered when reserving for billed and accrued lease receivables and straight-line rent receivables.

Full and partial reserves were recorded when determined to be appropriate with a corresponding charge to bad debt expense.

The primary impact of the adoption of ASC 842, “Leases,” on our recognition of lease revenue relates to the upfront and ongoing assessment of the collectability of substantially all lease payments required by the new standard.

For example, in the event that our collectibility determinations were not accurate and we were required to write off additional receivables equaling 1% of rental income, our rental income and net income would decrease by $8.3 million.

If leases currently classified as not probable are subsequently changed to probable, any lease receivables (including straight-line rent receivables) are re-instated with a corresponding increase to rental income.

Since March 2020, federal, state, and local governments have taken various actions to mitigate the spread of COVID-19.

This includes initially ordering closures of nonessential business and ordering residents to generally stay at home, subsequent phased re-openings, and during the fourth quarter of 2020, additional closures and capacity limitations as infection levels increased in certain areas.

These actions, along with the general concern over the spread of COVID-19, have resulted in many of our tenants temporarily or even permanently closing their businesses, and for some, it has impacted their ability to pay rent.

As a result, we revised our collectibility assumptions for many of our tenants most significantly impacted by COVID-19.

Accordingly, during the year ended December 31, 2020, we recognized collectibility related adjustments of $106.6 million.

This includes changes in our collectibility assessments from probable to not probable, disputed rents, and any rent abatements directly related to COVID-19, as well as the write-off of $12.7 million of straight-line rent receivables primarily related to tenants changed to a cash basis of revenue recognition during the year ended December 31, 2020.

As of December 31, 2020, the revenue from approximately 35% of our tenants (based on total number of commercial leases) is being recognized on a cash basis.

As of December 31, 2020 and 2019, our straight-line rent receivables balance was $103.3 million and $100.3 million, respectively, and is included in "accounts and notes receivable, net" on our consolidated balance sheet.

Other revenue recognition policies

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Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of a gain recognized will not occur.

We analyze the risk of a significant gain reversal and if necessary limit the amount of variable consideration recognized in order to mitigate this risk.

We analyze the risk of a significant gain reversal and if necessary limit the amount of

variable consideration recognized in order to mitigate this risk.

The estimation of variable consideration requires us to make assumptions and apply significant judgment.

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These reviews may take into account such factors as the historical retirement and replacement of our assets, expected redevelopments, and general economic and real estate factors.

economic life of the asset and affect the amount of depreciation expense to be charged against both the current and future revenues.

Certain events, such as unforeseen competition or changes in customer shopping habits, could substantially alter our assumptions regarding our ability to realize the expected return on investment in the property and therefore reduce the economic life of the asset and affect the amount of depreciation expense to be charged against both the current and future revenues.

These assessments have a direct impact on our net income.

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The value allocated to in-place leases is amortized over the related lease term and reflected as rental income in the statement of operations.

We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below market renewal option and include such renewal options in the calculation of in-place lease value when we consider these to be bargain renewal options.

We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below market renewal option and

include such renewal options in the calculation of in-place lease value when we consider these to be bargain renewal options.

If the value of below market lease intangibles includes renewal option periods, we include such renewal periods in the amortization period utilized.

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We have 17 entities that meet the criteria of a VIE and are consolidated.

Net real estate assets related to VIEs included in our consolidated balance were approximately $1.5 billion for both December 31, 2019 and 2018 , and mortgage payables related to VIEs included in our consolidated balance sheets were approximately $469.2 million and $444.4 million , as of December 31, 2019 and 2018 , respectively.

In addition, we hold equity method investments in two hotel joint ventures and one shopping center which are considered variable interests in a VIE.

Net real estate assets related to VIEs included in our consolidated balance were approximately $1.4 billion and $1.5 billion as of December 31, 2020 and 2019, respectively, and mortgage payables related to VIEs included in our consolidated balance sheets were approximately $413.7 million and $469.2 million, as of December 31, 2020 and 2019, respectively.

In addition, we hold equity method investments in two hotel joint ventures and one shopping center which are considered variable interests in a VIE as of December 31, 2020.

On January 4, 2021, we acquired our partner's interest in the Pike & Rose hotel joint venture.

See Note 15 to the consolidated financial statements for additional details of this transaction.

VIEs are required to be consolidated by their primary beneficiary.

The primary beneficiary of a VIE has both the power to direct the activities that most significantly impact economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE.

determination of the power to direct the activities that most significantly impact economic performance requires judgment and is impacted by numerous factors including the purpose of the VIE, contractual rights and obligations of variable interest holders, and mechanisms for the resolution of disputes among the variable interest holders.

The determination of the power to direct the activities that most significantly impact economic performance requires judgment and is impacted by numerous factors including the purpose of the VIE, contractual rights and obligations of variable interest holders, and mechanisms for the resolution of disputes among the variable interest holders.

Long-Lived Assets and Impairment

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Any difference between our estimate of a potential loss and the actual outcome would result in an increase or decrease to net income.

Self-Insurance

We are self-insured for general liability costs up to predetermined retained amounts per claim, and we believe that we maintain adequate accruals to cover our retained liability.

We currently do not maintain third party stop-loss insurance policies to cover liability costs in excess of predetermined retained amounts.

Our accrual for self-insurance liability is determined by management and is based on claims filed and an estimate of claims projected to be incurred but not yet reported.

Management considers a number of factors, including third-party actuarial analysis, previous experience in our portfolio, and future increases in costs of claims, when making these determinations.

If our liability costs differ from these accruals, it will increase or decrease our net income.

Recently Adopted and Recently Issued Accounting Pronouncements

See Note 2 to the consolidated financial statements.

2019 Property Acquisitions

Date Acquired

Gross Leasable Area (GLA)

Purchase Price

(in square feet)

(in millions)

2020 Property Acquisitions, Dispositions, and Impairment

Date Acquired Property City/State Gross Leasable Area (GLA) Purchase Price

(in square feet) (in millions)

January 10, 2020

Fairfax Junction Fairfax, Virginia 49,000 $ 22.3 (1)

February 12, 2020

Fairfax Junction

Fairfax, Virginia

September 13, 2019

San Antonio Center

Mountain View, California

November 15, 2019

Georgetowne Shopping Center

Brooklyn, New York

Hoboken (37 mixed-use buildings)

Hoboken, New Jersey

(1) These acquisitions were completed through a newly formed joint venture, for which we own a 90% interest.

This property includes 123 residential units in addition to the GLA in the table above.

2019 Property Dispositions

On December 11, 2019 , we received $154.7 million in net proceeds related to the sale under the threat of condemnation of 11.7 acres of San Antonio Center to a local school district ("the condemning authority").

As part of the transaction, the condemning authority will commence condemnation proceedings in order to terminate all existing leases they assumed at closing.

We have indemnified the condemning authority for all costs incurred related to the condemnation proceedings including any payments required to tenants at the property and expect the process will take several years to complete.

The consideration in the transaction is considered variable because we have agreed to indemnify the condemning authority for these costs.

Consequently, we have recorded a liability of $45.5 million to reflect our estimate of the final consideration, net of estimated condemnation proceeding costs and other transaction related costs.

The resulting net gain on sale is approximately $85.1 million .

During the year ended December 31, 2019 , we sold three properties and one land parcel for a net sales price of $149.0 million , which resulted in a net gain of $28.3 million .

During the year ended December 31, 2019 , we closed on the sale of 43 condominium units at our Assembly Row and Pike & Rose properties (combined), received proceeds net of closing costs of $20.1 million , and recognized a gain of $2.6 million , net of income taxes.

The cost basis for the remaining condominium units as of December 31, 2019 is $1.7 million , and is included in "assets held for sale" on our consolidated balance sheets.

Hoboken (2 mixed-use buildings) Hoboken, New Jersey 12,000

(1) This property is adjacent to, and will be operated as part of the property acquired in 2019.

The purchase price was paid with a combination of cash and the issuance of 163,322 downREIT operating partnership units.

Approximately $0.5 million and $0.4 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively.

(2) The purchase price includes the assumption of $8.9 million of mortgage debt, and is in addition to the 37 buildings previously acquired in 2019, and was completed through the same joint venture.

Less than $0.1 million and approximately $3.3 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively.

On September 1, 2020, the $60.6 million non-recourse mortgage loan on The Shops at Sunset Place matured.

The mortgage was not repaid, and thus the lender declared the loan in default.

We evaluated our long-term plans for the property, taking into account current market conditions and prospective development and redevelopment returns, as well as the impact of COVID-19 on the revenue prospects for the property, and concluded we did not expect to move forward with the planned redevelopment or repay the mortgage balance, and thus, did not expect to be long term holders of the asset.

Given these expectations, we recorded an impairment charge of $57.2 million during the third quarter of 2020.

The fair value estimate used to determine the impairment charge was determined by market comparable data and discounted cash flow analyses.

The cash flows utilized in such analyses are comprised of unobservable inputs which include forecasted rental revenue and expenses based upon market conditions and future expectations.

The capitalization rates and discount rates utilized in such analyses are based upon unobservable rates that we believe to be within a reasonable range of current market rates for the property.

Based on these inputs, we have determined that the $57 million estimated valuation of the property is classified within Level 3 of the fair value hierarchy.

On December 31, 2020, we sold The Shops at Sunset Place for $65.5 million and repaid the mortgage loan.

The resulting gain of $9.2 million is included in the cumulative 2020 gain of $98.1 million noted in the disposals below.

During the year ended December 31, 2020, we sold three properties (including The Shops at Sunset Place discussed above) and one building for a total sales price of $186.1 million, which resulted in a gain of $98.1 million.

During the year ended December 31, 2020, we closed on the sale of the remaining two condominium units at our Pike & Rose property, receiving proceeds net of closing costs of $2.1 million.

2020 Significant Debt and Equity Transactions

On January 31, 2019 , we repaid the $20.3 million mortgage loan on Rollingwood Apartments, at par, prior to its original maturity date.

On June 7, 2019 , we issued $300.0 million of fixed rate senior unsecured notes that mature on June 15, 2029 and bear interest at 3.20% .

In connection with the two buildings we acquired in Hoboken, New Jersey on February 12, 2020, we assumed two mortgage loans with a net face amount of $8.9 million and a fair value of $9.0 million.

The mortgage loans bear interest at 4.00% and mature on July 27, 2027.

In March 2020, in order to strengthen our financial position and balance sheet, to maximize our liquidity, and to provide maximum financial flexibility to continue our business initiatives as the effects of COVID-19 continue to evolve, we borrowed $990.0 million under our revolving credit facility, representing a draw-down of almost the entirety of our $1.0 billion revolving credit facility.

This amount was subsequently repaid when we entered into a $400.0 million unsecured term loan on May 6, 2020 and issued $700.0 million of fixed rate unsecured senior notes on May 11, 2020.

The unsecured term loan matures on May 6, 2021, plus one twelve month extension at our option, and bears interest at LIBOR plus 135 basis points based on our current credit rating.

Our net proceeds from this transaction after underwriting fees and other costs were $398.7 million.

The $700.0 million of unsecured senior notes issued in May 2020 comprise a $300.0 million reopening of our 3.95% of senior notes maturing on January 15, 2024 and a $400.0 million issuance of 3.50% senior notes maturing on June 1, 2030.

The 3.95% senior notes were offered at 103.257% of the principal amount with a yield to maturity of 2.944%, and have the same terms and are of the same series as the $300.0 million senior notes issued on December 9, 2013.

The 3.50% senior notes were offered at 98.911% of the principal amount with a yield to maturity of 3.630%.

Our net proceeds from these transactions after the net issuance premium, underwriting fees, and other costs were $700.1 million.

On September 1, 2020, the $60.6 million non-recourse mortgage loan on The Shops at Sunset Place matured and was not repaid.

The lender declared the loan in default until the non-recourse loan was repaid as part of the sale of the property on December 31, 2020.

The default did not trigger a cross default with any other indebtedness.

The repayment amount including accrued interest and fees, net of $4.5 million of escrows was $58.5 million.

On October 13, 2020, we issued $400.0 million of fixed rate senior unsecured notes that mature on February 15, 2026 and bear interest at 1.25%.

The notes were offered at 99.339% of the principal amount with a yield to maturity of 1.379%.

On August 21, 2019 , we issued an additional $100.0 million senior notes of the same series and with the same terms.

The August notes were offered at 103.813% of the principal amount, with a yield to maturity of 2.744% .

The combined net proceeds from the note offerings after net issuance premium, underwriting fees, and other costs were $399.9 million , which were primarily used to repay our $275.0 million unsecured term loan, at par, on June 7, 2019 and for general corporate purposes.

On July 25, 2019 , we amended our revolving credit facility to increase our borrowing capacity to $1.0 billion and extend the maturity date to January 19, 2024, plus two six-month extensions at our option.

Under the amended facility, the spread over LIBOR is 77.5 basis points based on our current credit rating.

In addition, we have an option (subject to bank approval) to increase the credit facility through an accordion feature to $1.5 billion.

In connection with our Hoboken, New Jersey acquisitions in 2019 , we assumed mortgage loans with a face amount of $41.6 million and a fair value of $42.9 million , and entered into a new mortgage loan with a face amount of $56.5 million .

The mortgage loans associated with our Hoboken acquisitions have the following contractual terms:

Stated Interest Rate

Maturity Date

(in millions)

September 18, 2019 (date assumed)

November 26, 2019 (date originated)

LIBOR + 1.95%

December 15, 2029

November 26, 2019 (date assumed)

December 19, 2019 (date assumed)

_____________________

The interest rate is effectively fixed at 3.67% as a result of two interest rate swap agreements.

The interest rates on these mortgages range from 3.91% to 5.00% and have maturity dates ranging from January 9, 2025 to May 31, 2029.

The interest rates on these mortgages range from 4.00% to 4.38% and have maturity dates ranging from October 1, 2025 to July 1, 2026.

On August 2, 2019 , we acquired the 10.1% redeemable noncontrolling interest in the partnership that owns our Montrose Crossing Shopping Center for $10.0 million , bringing our ownership interest to 100% .

The net proceeds of the notes, or "green bonds," after issuance discount, underwriting fees, and other costs were approximately $394.2

million, and will be allocated to the financing and refinancing of recently completed and future eligible green projects, which includes (i) investments in acquisitions of buildings;

(ii) building developments or redevelopments;

(iii) renovations in existing buildings;

and (iv) tenant improvement projects, in each case that have received, or are expected to receive, in the three years prior to the issuance of the notes or during the term of the notes, a LEED Silver, Gold, or Platinum certification (or environmentally equivalent successor standards).

Net proceeds allocated to previously incurred costs associated with eligible green projects will be available for repayment of indebtedness.

On December 15, 2020, we repaid our $250.0 million 2.55% notes prior to the original maturity date of January 15, 2021 at par.

The redemption price of $252.7 million included accrued but unpaid interest of $2.7 million.

On December 17, 2020, we acquired one of our partner's preferred and common interests in the partnership that owns our Plaza El Segundo property for $7.3 million, bringing our ownership to approximately 78.2%.

On December 31, 2020, we repaid our $250.0 million 3.00% notes prior to the original maturity date of August 1, 2022.

The redemption price of $263.5 million included a make-whole premium of $10.4 million and accrued but unpaid interest of $3.1 million.

The "early extinguishment of debt" charge in 2020 of $11.2 million includes the make-whole premium and the write off of the unamortized discount and debt issuance fees.

On December 31, 2020, we also repaid the $3.6 million mortgage loan on 29th Place, at par, prior to its original maturity date.

We have an at-the-market (“ATM”) equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $400.0 million.

We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay amounts outstanding under our revolving credit facility and/or for general corporate purposes.

For the year ended December 31, 2019 , we sold 1,069,699 common shares at a weighted average

price per share of $134.71 for net cash proceeds of $142.7 million and paid $1.2 million in commissions and $0.2 million in additional offering expenses related to the sales of these common shares.

For the year ended December 31, 2020, we sold 1,080,804 common shares at a weighted average price per share of $92.51 for net cash proceeds of $98.8 million including paying $1.0 million in commissions and $0.1 million in additional offering expenses related to the sales of these common shares.

As of December 31, 2020, we had the capacity to issue up to $28.4 million in common shares under our ATM equity program.

2021 Transactions

On January 4, 2021, we acquired our partner's 20% interest in our joint venture arrangement related to the Pike & Rose hotel for $2.3 million, and repaid the $31.5 million mortgage loan.

As a result of the transaction, we gained control of the hotel portion of this property, and effective January 4, 2021, we have consolidated this asset.

On February 5, 2021, we repaid the $16.2 million mortgage loan on Sylmar Town Center, at par, prior to its original maturity date.

We seek growth in earnings, funds from operations, and cash flows primarily through a combination of the following:

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• expansion of our portfolio through property acquisitions.

While the ongoing COVID-19 pandemic is impacting us in the short-term, our long-term focus has not changed.

Our comparable property growth is primarily driven by increases in rental rates on new leases and lease renewals, changes in portfolio occupancy, and the redevelopment of those assets.

Over the long-term, the infill nature and strong demographics of our properties provide a strategic advantage allowing us to maintain relatively high occupancy and generally increase rental rates.

We continue to see relatively strong levels of interest from prospective tenants for our retail spaces;

however, the time it takes to complete new lease deals is longer, as tenants have become more selective and more deliberate in their decision-making process.

We have also experienced extended periods of time for some government agencies to process permits and inspections further delaying rent commencement on newly leased spaces.

Additionally, we have seen an overall decrease in the number of tenants available to fill anchor spaces, and have seen an uptick in the number of retail tenants vacating prior to the end of their lease term and/or filing for bankruptcy.

However, our occupancy levels and ability to increase rental rates will be adversely impacted in the short-term as a result of COVID-19.

We believe the locations and nature of our centers and diverse tenant base partially mitigates any potential negative changes in the economic environment.

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At December 31, 2020, no single tenant accounted for more than 3.6% of annualized base rent.

Our properties are located primarily in densely populated and/or affluent areas with high barriers to entry which allow us to take advantage of redevelopment opportunities that enhance our operating performance through renovation, expansion, reconfiguration, and/or retenanting.

We evaluate our properties on an ongoing basis to identify these types of opportunities.

We currently have redevelopment projects underway with a projected cost of approximately $315 million that we expect to stabilize in the next several years.

We continue our ongoing redevelopment efforts at Santana Row and are under construction on an eight story 301,000 square foot office building which will include an additional 20,000 square feet of retail space and 1,300 parking spaces.

The building is expected to cost between $210 million and $220 million, to be delivered in 2020, and the office portion is 100% leased.

After current phases, we have approximately 4 acres remaining for further redevelopment and entitlements in place for an additional 395 residential units and 321,000 square feet of commercial space.

Additionally, we control 12 acres of land across from Santana Row, and we are proceeding with the first phase of construction on this land, which includes an eight story 376,000 square foot office building, with over 1,700 parking spaces.

Since March 2020, federal, state, and local governments have taken various actions to mitigate the spread of COVID-19.

These actions, along with the general concern over the spread of COVID-19 have resulted in many of our tenants temporarily or even permanently closing their businesses, and for some, it has impacted their ability to pay rent.

As of January 31, 2021, approximately 98% of our retail tenants were open.

These economic hardships have adversely impacted our business, and had a negative effect on our financial results during 2020 .

With very few exceptions, our leases require tenants to continue

to pay rent even while closed as a result of the pandemic, however, many tenants did not pay rents and other charges during the second quarter of 2020.

Subsequently, in the second half of 2020, a portion of our tenants have resumed paying their rent and/or other charges as their businesses were able to reopen;

however government mandated restrictions are still in order in many of our markets.

Our percentage of contractual rent collected each quarter has continued to increase since the low point in April 2020, including some tenants paying past due amounts.

As of December 31, 2020 , we have entered into agreements with approximately 32% of our tenants (based on total commercial leases) to defer rent payments to later periods, largely through 2021, although some extend beyond, and negotiations with other tenants are still ongoing.

While increasing cash collection rates is a positive trend driven by government mandated restrictions gradually being lifted, we expect that our rent collections will continue to be below our tenants’ contractual rent obligations and historical levels, which will continue to adversely impact our results of operations.

The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted.

Depending upon the duration of tenant closures, operating restrictions, and the overall economic downturn resulting from COVID-19, we may find that even deferred rents are difficult to collect, and we may experience higher vacancy levels.

While the duration and severity of the economic impact resulting from COVID-19 is unknown, we seek to position the Trust to participate in the resulting economic recovery.

We continue to have several development projects in process, albeit at a slower pace due to COVID-19 related restrictions, being delivered as follows:

• In the 1 st quarter of 2020, we delivered the fully leased eight story, 301,000 square foot office building at Santana Row.

• The first phase of construction on the 12 acres of land that we control across from Santana Row includes an eight story 376,000 square foot office building, with over 1,700 parking spaces.

The building is expected to cost between $250 million and $270 million with openings beginning in 2022.

In addition, the land also has approximately 604,000 square feet of remaining commercial space entitlements.

Phase II of Assembly Row includes approximately 161,000 square feet of retail space, 447 residential units, and a 158 room boutique hotel (owned and operated by a joint venture in which we are a partner).

As of December 31, 2019, Phase II is substantially complete with expected final costs of $298 million to $302 million.

Phase II also included 122 for-sale condominium units, which had a total cost of $81 million and have all have been sold as of December 31, 2019.

Additionally, we are under construction on Phase III of Assembly Row, which will include 277,000 square feet of office space (of which, 150,000 square feet is pre-leased), 56,000 square feet of retail space, 500 residential units, and over 800 additional parking spaces.

• Phase III of Assembly Row includes 277,000 square feet of office space (of which, 150,000 square feet is pre-leased), 56,000 square feet of retail space, 500 residential units, and over 800 additional parking spaces.

The expected costs for Phase III are between $465 million and $485 million and is projected to open beginning in 2021.

Phase II of Pike & Rose includes approximately 219,000 square feet of retail space, 272 residential units, and a 177 room boutique hotel (owned and operated by a joint venture in which we are a partner), and is substantially complete as of December 31, 2019.

The total cost for this portion of Phase II was $208 million.

As of December 31, 2019, we closed on the sale of 97 of the 99 for-sale condominium units in Phase II.

The condominiums had a final cost of $62 million.

Additionally, at Pike & Rose, we commenced construction on a 212,000 square foot office building (which includes 4,000 square feet of ground floor retail space), and will include over 600 additional parking spaces.

The building is expected to cost between $128 million and $135 million and is projected to open beginning in 2020.

We invested $258 million in Assembly Row, Pike & Rose, and Santana Row in 2019 , net of public funding, and expect to invest between $320 million and $350 million in Assembly Row, Pike & Rose, and Santana Row in 2020 .

• At Pike & Rose, we have continued construction on a 212,000 square foot office building (which includes 7,000 square feet of ground floor retail space), and includes over 600 additional parking spaces.

The building is expected to cost between $128 million and $135 million.

At December 31, 2020, approximately 61,000 square feet of office space has been delivered, of which approximately 45,000 square feet is our new corporate headquarters.

• Our properties are located primarily in densely populated and/or affluent areas with high barriers to entry which allow us to take advantage of redevelopment opportunities that enhance our operating performance through renovation, expansion, reconfiguration, and/or retenanting.

We evaluate our properties on an ongoing basis to identify these types of opportunities.

Throughout the portfolio, we currently have redevelopment projects underway with a projected total cost of approximately $320 million that we expect to stabilize over the next several years.

The above includes our best estimates based on information currently known, however, the completion of construction, final costs, and the timing of openings and rent starts will be dependent upon the duration of governmental restrictions and the duration and severity of the economic impacts of COVID-19.

The development of future phases of Assembly Row, Pike & Rose and Santana Row will be pursued opportunistically based on, among other things, market conditions, tenant demand, and our evaluation of whether those phases will generate an appropriate financial return.

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Information provided on a comparable property basis includes the results of properties that we owned and operated for the entirety of both periods being compared except for properties that are currently under development or are being repositioned for significant redevelopment and investment.

For the year ended December 31, 2019 and the comparison of 2019 and 2018 , all or a portion of 95 properties were considered comparable properties and eight properties were considered non-comparable properties.

For the year ended December 31, 2019 , seven properties were moved from acquisitions to comparable properties, two properties were removed from comparable properties as they were sold during 2019, one property was moved from acquisitions to non-comparable properties, and one portion of a property was moved from non-comparable properties to comparable properties, compared to the designations as of December 31, 2018 .

For the year ended December 31, 2020 and the comparison of 2020 and 2019, all or a portion of 95 properties were considered comparable properties and seven were considered non-comparable properties.

For the year ended December 31, 2020, two properties and two portions of properties were moved from non-comparable to comparable properties, two properties and one portion of a property were removed from comparable properties and one property was removed from non-comparable properties as they were sold during 2020, one property was moved from acquisitions to non-comparable properties, and one property was moved from comparable to non-comparable properties, compared to the designations as of December 31, 2019.

While there is judgment surrounding changes in designations, we typically move non-comparable properties to comparable properties once they have stabilized, which is typically considered 90% physical occupancy or when the growth expected from the redevelopment has been included in the comparable periods.

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YEAR ENDED DECEMBER 31, 2020 COMPARED TO YEAR ENDED DECEMBER 31, 2019

2020 2019 Dollars %

(Dollar amounts in thousands)

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Property operating income (1)

545,332 637,030 (91,698) (14.4) %

General and administrative expense (41,680) (42,754) 1,074 (2.5) %

Depreciation and amortization (255,027) (239,758) (15,269) 6.4 %

Gain on sale of real estate, net

Impairment charge (57,218) — (57,218) 100.0 %

Gain on sale of real estate, net of tax 98,117 116,393 (18,276) (15.7) %

Operating income 289,524 470,911 (181,387) (38.5) %

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Interest expense (136,289) (109,623) (26,666) 24.3 %

Early extinguishment of debt (11,179) — (11,179) 100.0 %

Loss from partnerships (8,062) (2,012) (6,050) 300.7 %

Total other, net (153,636) (110,369) (43,267) 39.2 %

Net income 135,888 360,542 (224,654) (62.3) %

Net income attributable to noncontrolling interests (4,182) (6,676) 2,494 (37.4) %

Net income attributable to the Trust $ 131,706 $ 353,866 $ (222,160) (62.8) %

(1) Property operating income is a non-GAAP financial measure.

Selected Financial Data for further discussion.

(1) Property operating income is a non-GAAP measure that consists of rental income and mortgage interest income, less rental expenses and real estate taxes.

This measure is used internally to evaluate the performance of property operations and we consider it to be a significant measure.

Property operating income should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP.

Property Revenues

Total property revenue increased $20.4 million , or 2.2% , to $935.8 million in 2019 compared to $915.4 million in 2018 .

Total property revenue decreased $100.3 million, or 10.7%, to $835.5 million in 2020 compared to $935.8 million in 2019.

The percentage occupied at our shopping centers was 90.2% at December 31, 2020 compared to 92.5% at December 31, 2019.

The most significant driver of the decrease in property revenues is the impact of COVID-19, as many of our tenants were forced to temporarily or in some cases permanently close their businesses, resulting in changes in our collectibility estimates and in some cases rent abatement.

Changes in the components of property revenue are discussed below.

Rental Income

Rental income consists primarily of minimum rent, cost reimbursements from tenants and percentage rent.

Rental income increased $20.5 million , or 2.2% , to $932.7 million in 2019 compared to $912.3 million in 2018 due primarily to the following:

an increase of $14.9 million at comparable properties due primarily to higher rental rates of approximately $11.8 million, higher lease termination fees and legal fee income of $7.6 million, and higher average occupancy of approximately $2.8 million, partially offset by a $4.4 million decrease in real estate tax recoveries primarily due to the requirements of the new lease accounting standard, and $2.5 million related to collectibility adjustments, which are now being presented as a reduction of rental income rather than rental expense (see Note 2 for additional disclosure)

an increase of $9.2 million at non-comparable properties due primarily to the opening of Phase II at Assembly Row and Pike & Rose partially offset by redevelopment related occupancy decreases at three properties, and

an increase of $3.9 million from acquisitions, primarily Fairfax Junction in February 2019, Hoboken during the second half of 2019, and Georgetowne Shopping Center in November 2019,

Rental income consists primarily of minimum rent, cost reimbursements from tenants and percentage rent, and is net of collectiblity related impacts.

Rental income decreased $100.6 million, or 10.8%, to $832.2 million in 2020 compared to $932.7 million in 2019 due primarily to the following:

• higher collectibility related impacts including rent abatements across all properties of $102.1 million primarily the result of COVID-19 impacts.

This includes the write-off of $12.7 million of straight-line receivables primarily related to tenants who were changed to cash basis of revenue recognition during the year ended December 31, 2020.

• a decrease of $24.6 million at comparable properties due primarily to lower average occupancy rates of approximately $18.0 million, lower parking income and percentage rent of of $6.3 million primarily due to the impacts from COVID-19 related closures, lower recoveries of $5.3 million primarily the result of lower snow removal expense and utilities, and lower termination fee and legal fee income of $1.3 million, partially offset by higher rental rates of approximately $9.3 million, and

• decrease of $14.4 million from property sales,

partially offset by

a decrease of $8.4 million from property sales.

• and increase of $19.7 million from non comparable properties driven by the opening of our new office building at Santana Row in early 2020 and the opening of Freedom Plaza in 2020 and

• an increase of $19.5 million from acquisitions of Hoboken during the second half of 2019 and early 2020, and Georgetowne Shopping Center in November 2019.

Property Expenses

Total property expenses increased $10.9 million , or 3.8% , to $298.8 million in 2019 compared to $287.9 million in 2018 .

Total property expenses decreased $8.6 million, or 2.9%, to $290.2 million in 2020 compared to $298.8 million in 2019.

Changes in the components of property expenses are discussed below.

Rental Expenses

Rental expenses increased $14.7 million , or 8.5% , to $187.8 million in 2019 compared to $173.1 million in 2018 .

This increase is primarily due to the following:

Rental expenses decreased $16.9 million, or 9.0%, to $170.9 million in 2020 compared to $187.8 million in 2019.

This decrease is primarily due to the following:

• an $11.9 million charge in 2019 related to the buyout of a lease at Assembly Square Marketplace,

an increase of $1.9 million from comparable properties due primarily to a $5.2 million increase in repairs and maintenance costs partially offset by a $4.2 million decrease in bad debt expense due to the new lease accounting standard requirement to record collectibility adjustments as a reduction to revenue rather than rental expense effective at adoption on January 1, 2019,

an increase of $1.2 million from non-comparable properties due primarily to the opening of Phase II at Assembly Row and Pike & Rose, partially offset by lower expenses at two of our properties, and

an increase of $0.8 million from acquisitions,

• a decrease of $9.5 million from comparable properties due to lower snow removal expenses, and lower repairs and maintenance, management fees, and utilities primarily driven by the impact of COVID-19 partially offset by an increase in insurance costs, and

• a decrease of $2.2 million from our property sales,

partially offset by

a decrease of $1.4 million from property sales.

• an increase of $2.8 million from acquisitions of Hoboken during the second half of 2019 and early 2020, and Georgetowne Shopping Center in November 2019, and

• an increase of $2.5 million from non comparable properties driven by the opening of our new office building at Santana Row in early 2020 and the opening of Freedom Plaza in 2020.

As a result of the changes in rental income and rental expenses as discussed above, rental expenses as a percentage of rental income increased to 20.5% for the year ended December 31, 2020 from 20.1% for the year ended December 31, 2019.

Real Estate Taxes

Real estate tax expense decreased $3.8 million , or 3.4% to $110.9 million in 2019 compared to $114.8 million in 2018 due primarily to the following:

a decrease of $3.2 million from comparable properties due primarily to the new lease accounting standard requirement, which no longer permits the gross up of real estate tax revenue and expense for real estate taxes that our tenants pay directly to the taxing authority (see Note 2 for additional disclosure) of $5.0 million and a tax refund from a multi-year appeal and reassessment for three of our properties, partially offset by higher assessments, and

a decrease of $1.8 million from property sales,

Real estate tax expense increased $8.3 million, or 7.5% to $119.2 million in 2020 compared to $110.9 million in 2019 due primarily to the following:

• an increase of $3.8 million from comparable properties due to higher current year assessments, and tax refunds recorded in 2019 from a multi-year appeal and reassessment at three of our properties,

• an increase of $3.1 million from acquisitions of Hoboken during the second half of 2019 and early 2020 and Georgetowne Shopping Center in November 2019, and

• an increase of $2.3 million from non-comparable properties due primarily to the opening of our new office building at Santana Row in early 2020,

partially offset by

an increase of $0.7 million from acquisitions, and

an increase of $0.5 million at non-comparable properties due primarily to increases in assessments as a result of our redevelopment activities.

• a decrease of $0.8 million from our property sales.

Property Operating Income

Property operating income increased $9.5 million , or 1.5% , to $637.0 million in 2019 compared to $627.6 million in 2018 .

This increase is primarily due to growth in earnings at comparable properties, the opening of Phase II at Assembly Row and Pike & Rose, and our 2019 acquisitions, partially offset by the charge related to the buyout of a lease at Assembly Square Marketplace, and property sales.

Property operating income decreased $91.7 million, or 14.4%, to $545.3 million in 2020 compared to $637.0 million in 2019.

This decrease is primarily due to the impact of COVID-19, which resulted in higher collectibility related impacts, lower percentage rent, and lower parking income;

as well as the impact of property sales, partially offset by the opening of our new office building at Santana Row in early 2020, property acquisitions, and the prior year charge related to the buyout of a lease at Assembly Square Marketplace.

Other Operating

General and Administrative Expense

General and administrative expense increased $9.2 million , or 27.2% , to $42.8 million in 2019 from $33.6 million in 2018 .

This increase is due primarily to higher leasing related costs as certain costs can no longer be capitalized as a result of the new lease accounting standard (see Note 2 for additional disclosure) and higher personnel costs.

General and administrative expense decreased $1.1 million, or 2.5%, to $41.7 million in 2020 from $42.8 million in 2019.

This decrease is due primarily to lower personnel related costs and COVID-19 impacts including office closures and cancellations of all non-essential business travel and company events.

Depreciation and Amortization

Depreciation and amortization expense decreased $4.5 million , or 1.8% , to $239.8 million in 2019 from $244.2 million in 2018 .

This decrease is primarily due to lower accelerated depreciation related to tenants who vacated in advance of their lease expiration and property sales, partially offset by Phase II of Assembly Row and Pike & Rose being placed in service and our 2019 acquisitions.

Gain on Sale of Real Estate, Net

Depreciation and amortization expense increased $15.3 million, or 6.4%, to $255.0 million in 2020 from $239.8 million in 2019.

The increase is due primarily to property acquisitions, the opening of our new office buildings at Santana Row in early 2020, and the write off of lease related assets for vacating tenants, partially offset by property sales.

Impairment Charge

The $57.2 million impairment charge for the year ended December 31, 2020 relates to The Shops at Sunset Place.

See Note 3 to the consolidated financial statements for further discussion.

Gain on Sale of Real Estate, Net of Tax

The $98.1 million gain on sale of real estate, net of tax for the year ended December 31, 2020 is due to the sale of three properties and one building.

The $116.4 million gain on sale of real estate, net for the year ended December 31, 2019 is primarily due to the following:

• $85.1 million related to the sale under the threat of condemnation of 11.7 acres of San Antonio Center,

$28.3 million related to the sale of three properties and one land parcel,

$2.6 million net gain related to condominium unit sales that have closed at our Assembly Row and Pike & Rose properties.

The $11.9 million gain on sale of real estate, net for the year ended December 31, 2018 is primarily due to the following:

• $28.3 million related to the sale of three properties and one land parcel, and

• $2.6 million net gain related to condominium unit sales that have closed at our Assembly Row and Pike & Rose properties.

$4.7 million gain related to the sale of one property and the residential building at another one of our properties

Operating Income

Operating income increased $109.3 million , or 30.2% , to $470.9 million in 2019 compared to $361.6 million in 2018 .

This increase is due primarily to higher gains on the sale of real estate in 2019, growth in earnings at our comparable properties, and the opening of Phase II of Assembly Row and Pike & Rose, partially offset by the charge related to the buyout of a lease at Assembly Square Marketplace, higher leasing and personnel related costs, and property sales.

Operating income decreased $181.4 million, or 38.5%, to $289.5 million in 2020 compared to $470.9 million in 2019.

This decrease is due primarily due to the impact of COVID-19, which resulted in higher collectibility related impacts, the impairment charge related to The Shops at Sunset Place, a lower net gain on the sale of real estate, and the impact of property sales, lower percentage rent, and lower parking income, partially offset by the opening of our new office building at Santana Row in early 2020, property acquisitions, the prior year charge related to the buyout of a lease at Assembly Square Marketplace, and lower personnel related costs which were largely due to the impact of COVID-19.

Interest Expense

Interest expense decreased $0.5 million , or 0.5% , to $109.6 million in 2019 compared to $110.2 million in 2018 .

This decrease is due primarily to a $1.6 million increase in capitalized interest partially offset by a $1.1 million increase due to a higher weighted average borrowing rate in 2019.

Interest expense increased $26.7 million, or 24.3%, to $136.3 million in 2020 compared to $109.6 million in 2019.

This increase is due primarily to the following:

• an increase of $20.2 million from higher borrowings in response to the COVID-19 pandemic (see further discussions in "2020 Significant Debt and Equity Transactions" in Part II, Item 7 of the Annual Report) and

• an increase of $13.0 million due to higher weighted average borrowings primarily from the $400 million issuance of our 3.20% notes in 2019, and $106.9 million of mortgage loans associated with our Hoboken acquisitions,

partially offset by

• a decrease of $3.7 million due to a lower overall weighted average borrowing rate, and

• an increase of $2.9 million in capitalized interest, primarily attributable to the development of Phase III of Assembly Row and Pike & Rose.

Gross interest costs were $159.7 million and $130.1 million in 2020 and 2019, respectively.

Capitalized interest was $23.4 million and $20.5 million in 2020 and 2019, respectively.

Early Extinguishment of Debt

The $11.2 million early extinguishment of debt for the year ended December 31, 2020 relates to the make-whole premium paid as part of the early redemption of our 3.00% senior notes on December 31, 2020 and the related write-off of the unamortized discount and debt fees.

Loss from Partnerships

Loss from partnerships decreased to $2.0 million in 2019 compared to $3.4 million in 2018 .

This decrease is due primarily to improved operating results at our Assembly Row and Pike & Rose hotel joint ventures, which opened in August 2018 and March 2018, respectively.

Loss from partnerships increased to $8.1 million in 2020 compared to $2.0 million in 2019.

The increase is primarily due to our share of losses from our hotel investments at Assembly Row and Pike & Rose, largely the result of COVID-19 related reductions in travel.

Net income attributable to noncontrolling interests

Net income attributable to noncontrolling interests decreased to $4.2 million in 2020 compared to $6.7 million in 2019.

The decrease is driven by lower net income at our partnership properties primarily due to the impact of COVID-19, partially offset by higher income attributable to our operating partnership units due to additional downREIT operating partnership units issued in connection with the acquisition of Fairfax Junction in January 2020.

Discussions of year-to-year comparisons between 2019 and 2018 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the Securities and Exchange Commission on February 10, 2020.

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The cash generated from operations is primarily paid to our common and preferred shareholders in the form of dividends.

As a REIT, we must generally make annual distributions to shareholders of at least 90% of our taxable income.

Our short-term liquidity requirements consist primarily of normal recurring operating expenses, obligations under our capital and operating leases, regular debt service requirements (including debt service relating to additional or replacement debt, as well as scheduled debt maturities), recurring expenditures, non-recurring expenditures (such as tenant improvements and redevelopments) and dividends to common and preferred shareholders.

Our long-term capital requirements consist primarily of maturities under our long-term debt agreements, development and redevelopment costs and potential acquisitions.

We intend to operate with and maintain a conservative capital structure that will allow us to maintain strong debt service coverage and fixed-charge coverage ratios as part of our commitment to investment-grade debt ratings.

In the short and long term, we may seek to obtain funds through the issuance of additional equity, unsecured and/or secured debt financings, joint venture relationships relating to existing properties or new acquisitions, and property dispositions that are consistent with this conservative structure.

At December 31, 2019 , we had cash and cash equivalents of $127.4 million and no outstanding balance on our unsecured revolving credit facility.

For the year ended 2019 , the maximum amount of borrowings outstanding under our revolving credit facility was $116.5 million , the weighted average amount of borrowings outstanding was $26.8 million , and the weighted average interest rate, before amortization of debt fees, was 3.2% .

On June 7, 2019, we issued $300.0 million of fixed rate senior unsecured notes that mature on June 15, 2029 and bear interest at 3.20%.

On August 21, 2019, we issued an additional $100.0 million senior notes of the same series and with the same terms.

The combined net proceeds of $399.9 million were primarily used to repay our $275.0 million unsecured term loan, which was scheduled to mature in November 2019.

During 2020, we have only $60.6 million of debt maturing.

On July 25, 2019, we amended our revolving credit facility to increase our borrowing capacity from $800.0 million to $1.0 billion, lower our spread over LIBOR from 82.5 basis points to 77.5 basis points, and extend the maturity date to January 19, 2024, plus two six-month extensions at our option.

In addition,we have an option (subject to bank approval) to increase the credit facility through an accordion feature to $1.5 billion.

During 2019, we raised $142.7 million under our ATM equity program after fees and other costs, and as of December 31, 2019 , we had the capacity to issue up to $128.3 million in common shares under the ATM program.

We currently believe that cash flows from operations, cash on hand, our ATM program, our revolving credit facility and our general ability to access the capital markets will be sufficient to finance our operations and fund our debt service requirements and capital expenditures.

Our overall capital requirements during 2020 will depend upon acquisition opportunities, the level of improvements and redevelopments on existing properties and the timing and cost of development of Assembly Row, Pike & Rose and Santana Row.

While the amount of future expenditures will depend on numerous factors, we expect to continue to see higher levels of capital investments in our properties under development and redevelopment, as we continue to invest in the next phase of these projects.

With respect to other capital investments related to our existing properties, we expect to incur levels consistent with prior years.

Our capital investments will be funded on a short-term basis with cash flow from operations, cash on hand and/or our revolving credit facility, and on a long-term basis, with long-term debt or equity including shares issued under our ATM equity program.

If necessary, we may access the debt or equity capital markets to finance significant acquisitions.

Given our past ability to access the capital markets, we expect debt or equity to be available to us.

Although there is no intent at this time, if market conditions deteriorate, we may also delay the timing of certain development and redevelopment projects as well as limit future acquisitions, reduce our operating expenditures, or re-evaluate our dividend policy.

In addition to conditions in the capital markets which could affect our ability to access those markets, the following factors could affect our ability to meet our liquidity requirements:

restrictions in our debt instruments or preferred shares may limit us from incurring debt or issuing equity at all, or on acceptable terms under then-prevailing market conditions;

we may be unable to service additional or replacement debt due to increases in interest rates or a decline in our operating performance.

As a REIT, we must generally make annual distributions to shareholders of at least 90% of our taxable income (cash dividends paid in 2020 were approximately $325.4 million).

Remaining cash flow from operations after dividend payments is used to fund recurring and non-recurring capital projects (such as tenant improvements and redevelopments), and regular debt service requirements (including debt service relating to additional or replacement debt, as well as scheduled debt maturities).

In 2020, our dividends were funded not only by cash from operations but also other sources of liquidity.

We maintain a $1.0 billion revolving credit facility to fund short term cash flow needs and also look to the public and private debt and equity markets, joint venture relationships, and property dispositions to fund capital expenditures on a long-term basis.

We are currently experiencing lower levels of cash from operations due to lower rent collections from tenants impacted by the COVID-19 pandemic (see further discussion under the "Outlook" section of this Item 2).

While the overall economic impacts of the pandemic are unknown, we have taken multiple steps during the last several months to strengthen our financial position, maximize liquidity, and to provide maximum flexibility during these uncertain times.

Throughout the last three quarters of 2020, we have maintained levels of cash significantly in excess of the cash balances we have historically maintained.

In March 2020, we borrowed $990.0 million under our revolving credit facility, representing a draw-down of almost the entirety of our $1.0 billion credit facility.

In May 2020, we entered into a $400.0 million unsecured term loan and issued $700.0 million of fixed rate unsecured senior notes for combined net proceeds of $1.1 billion.

We subsequently repaid the outstanding balance on our revolving credit facility and amended how certain covenants are calculated to provide us more operating flexibility.

Additionally, on October 13, 2020, we issued $400.0 million of fixed rate senior unsecured notes that mature on February 15, 2026 and bear interest at 1.25%.

During the fourth quarter 2020, we raised $98.8 million under our ATM equity program after fees and other costs.

As of December 31, 2020, there is no outstanding balance on our $1.0 billion unsecured revolving credit facility, we had cash and cash equivalents of $798.3 million, and we had the capacity to issue up to $28.4 million in common shares under the ATM program.

For the year ended 2020, the weighted average amount of borrowings outstanding on our revolving credit facility was $138.5 million, and the weighted average interest rate, before amortization of debt fees, was 1.5%.

Subsequent to December 31, 2020, we repaid one mortgage loan, resulting in only $7.9 million of debt maturing in 2021, excluding our $400.0 million term loan, which may be extended for an additional twelve months at our option.

Our overall capital requirements during 2021 will be impacted by the extent and duration of COVID-19 related closures, impacts on our cash collections, and overall economic impacts including any halts to construction activities that might occur.

It will also be impacted by acquisition opportunities and the level and general timing of our redevelopment and development activities.

these projects and are not expecting COVID-19 related halts in construction activities as we experienced in 2020.

With respect to other capital investments related to our existing properties, we expect to incur levels more consistent with prior years with an overall increase compared to 2020.

We believe that the cash on our balance sheet together with rents we collect, as well as our $1.0 billion revolving credit facility will allow us to continue to operate our business in the near-term.

Given our recent ability to access capital markets, we also expect debt or equity to be available to us.

We may also further delay the timing of certain development and redevelopment projects, as well as limit future acquisitions, reduce our operating expenditures, or re-evaluate our dividend policy.

While the COVID-19 pandemic has negatively impacted our business during the year ended December 31, 2020, and we expect it will continue to negatively impact our business in the short term, we intend to operate with and to maintain our long term commitment to a conservative capital structure that will allow us to maintain strong debt service coverage and fixed-charge coverage ratios as part of our commitment to investment-grade debt ratings.

Summary of Cash Flows

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Cash used in investing activities (368,383) (316,532)

Cash used in financing activities

Cash provided by (used in) financing activities 661,736 (100,105)

Increase in cash and cash equivalents 663,282 45,282

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Net cash provided by operating activities decreased $92.0 million to $369.9 million during 2020 from $461.9 million during 2019.

The decrease was primarily attributable to the $14.5 million lease buyout payment at Assembly Square Marketplace in August 2019, $12.4 million in net proceeds in 2018 from the Freedom Plaza new market tax credit transaction (see Note 3 to the Consolidated Financial Statements for further discussion), and the timing of cash receipts.

The decrease was primarily attributable to lower net income before non-cash items and the timing of cash receipts, both largely driven by impacts of the COVID-19 pandemic and payments of annual real estate tax recovery billings.

Net cash used in investing activities increased $51.9 million to $368.4 million during 2020 from $316.5 million during 2019.

The increase was primarily attributable to:

a $191.0 million increase in acquisitions of real estate, primarily due to the acquisitions of Georgetowne Shopping Center, 37 mixed-use buildings in Hoboken, New Jersey, and Fairfax Junction in 2019,

a $41.7 million increase in capital expenditures as we continue to invest in Pike & Rose, Assembly Row, Santana Row and other redevelopments, and

$38.0 million in proceeds from our Assembly Row hotel joint venture formation in 2018,

• a $138.5 million decrease in proceeds from sales of real estate, resulting from the sale of three properties, one building, and the two remaining condominium units at our Pike & Rose property in 2020, as compared to the sale under the threat of condemnation of a portion of San Antonio Center and the sale of three properties, one land parcel, and the sale of 43 condominiums at our Assembly Row and Pike & Rose properties in 2019,

• a $81.6 million increase in capital expenditures and leasing costs as we continue to invest in Pike & Rose, Assembly Row, Santana Row and other redevelopments,

• $12.9 million for net costs paid in 2020 relating to the partial sale under threat of condemnation at San Antonio Center in 2019, and

• a $9.6 million acquisition of two loans secured by a shopping center in Rockville, Maryland, that is owned by a third party,

partially offset by

a $144.2 million increase in proceeds from sales of real estate, resulting from the sale under the threat of condemnation of a portion of San Antonio Center in December 2019 and the sale of three additional properties in 2019 compared to two properties in 2018, partially offset by a decrease in the sale of condominiums at our Assembly Row and Pike & Rose properties.

Net cash used in financing activities decreased $141.2 million to $100.1 million during 2019 from $241.3 million during 2018 .

The decrease was primarily attributable to:

$399.9 million in net proceeds from the issuance of $300.0 million of 3.20% senior unsecured notes in June 2019 and an additional $100.0 million of the same series in August 2019,

$41.0 million of repayments on our revolving credit facility in 2018 partially offset by $4.0 million of costs related to the July 2019 amendment, and

a $12.1 million increase in net proceeds from the issuance of 1.1 million common shares under our ATM program at a weighted average price of $134.71 during 2019, as compared to 1.0 million common shares at a weighted average price of $129.19 in 2018,

• a $194.9 million decrease in acquisitions of real estate, primarily due to the acquisitions of Georgetowne Shopping Center, 37 mixed-use buildings in Hoboken, New Jersey, and Fairfax Junction in 2019, partially offset by the acquisition of two additional buildings in Hoboken, New Jersey in 2020.

Net cash provided by financing activities increased $761.8 million to $661.7 million during 2020 from $100.1 million used in during 2019.

The increase was primarily attributable to:

• a $694.4 million increase due to net proceeds of $700.1 million from the issuance of $400.0 million of 3.50% unsecured senior notes and the $300.0 million reopening of our 3.95% unsecured senior notes in May 2020, and $394.2 million from the issuance of $400.0 million of 1.25% unsecured senior notes in October 2020, as compared to $399.9 million in net proceeds from the issuance of $300.0 million of 3.20% senior unsecured notes in June 2019 and an additional $100.0 million of the same series in August 2019,

• $398.7 million in net proceeds from our unsecured term loan in May 2020, and

• a $230.8 million decrease in repayment of mortgages, finance leases, and notes payable primarily due to the repayment of our $275.0 million unsecured term loan in June 2019 and the $20.3 million payoff of the mortgage loan on Rollingwood Apartments in January 2019, partially offset by the $60.6 million payoff of the mortgage loan on The Shops at Sunset Place in December 2020 and the $3.6 million payoff of the mortgage loan on 29th Place, both in December 2020,

partially offset by

a $284.4 million increase in repayment of mortgages, finance leases, and notes payable primarily due to the payoff of our $275.0 million unsecured term loan in June 2019 and the $20.3 million payoff of the mortgage loan on Rollingwood Apartments in January 2019, as compared to the $10.5 million payoff of the mortgage loan on the Grove at Shrewsbury (West) in March 2018, and

• $510.4 million from the December 2020 redemptions of our our $250.0 million 2.55% unsecured senior notes and our $250.0 million 3.00% unsecured senior notes, with a make-whole premium of $10.4 million,

• $43.9 million decrease in net proceeds from the issuance of 1.1 million common shares under our ATM program at a weighted average price of $92.51 during 2020, as compared to 1.1 million common shares at weighted average price of $134.71 in 2019, and

• a $10.9 million increase in dividends paid to shareholders due to an increase in the common share dividend rate and an increase in the number of common shares outstanding.

Contractual Commitments

The following table provides a summary of our fixed, noncancelable obligations as of December 31, 2019 :

Commitments Due by Period

Cash Requirements

The following table provides a summary of material cash requirements comprising our fixed, noncancelable obligations as of December 31, 2020:

Cash Requirements by Period

Total Next Twelve Months Greater than Twelve Months

(In thousands)

Fixed rate debt (principal and interest) (1)

Fixed and variable rate debt - our share of unconsolidated real estate partnerships (principal and interest)

Finance lease obligations (principal and interest)

Variable rate debt (principal only)(2)

Operating leases

Fixed and variable rate debt (principal only) (1) $ 4,308,505 $ 428,777 3,879,728

Fixed and variable rate debt - our share of unconsolidated real estate partnerships (principal only)(2) 53,341 33,943 19,398

Lease obligations (minimum rental payments) (3) 355,687 10,877 344,810

Redevelopments/capital expenditure contracts 356,068 328,548 27,520

Real estate commitments (4) 100,100 — 100,100

Development, redevelopment, and capital improvement obligations

Contractual operating obligations

Total contractual obligations

Total estimated cash requirements $ 5,173,701 $ 802,145 $ 4,371,556

_____________________

Fixed rate debt includes a $56.5 million mortgage loan that has a rate that is effectively fixed by two interest rate swap agreements.

Variable rate debt includes our revolving credit facility, which bears interest at LIBOR + 0.775% and had no balance outstanding at December 31, 2019 .

(1) The weighted average interest rate on our fixed and variable rate debt is 3.32% as of December 31, 2020.

(2) The weighted average interest rate on the fixed and variable rate debt related to our unconsolidated real estate partnerships is 4.59% as of December 31, 2020.

$25.2 million of the requirements in the next twelve months was repaid when we acquired our partners' share of the Pike & Rose hotel joint venture on January 4, 2021.

See Note 15 to the consolidated financial statements for additional information.

(3) This includes minimum rental payments related to both finance and operating leases.

(4) This includes the liability related to the sale under threat of condemnation at San Antonio Center as further discussed in Note 3 and Note 7 to the consolidated financial statements.

In addition to the amounts set forth in the table above and other liquidity requirements previously discussed, the following potential commitments exist:

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If the other minority partner defaults in their obligation, we must purchase the full interest.

Based on management’s current

estimate of fair market value as of December 31, 2019 , our estimated liability upon exercise of the put option would range from approximately $79 million to $84 million .

Based on management’s current estimate of fair market value as of December 31, 2020, our estimated liability upon exercise of the put option would range from approximately $69 million to $72 million.

(b) Under the terms of various other partnership agreements, the partners have the right to exchange their operating partnership units for cash or the same number of our common shares, at our option.

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(f) At December 31, 2020, we had letters of credit outstanding of approximately $4.7 million.

(g) In connection with our sale under the threat of condemnation of a portion of San Antonio Center, we agreed to indemnify the condemning authority for costs including any payments required to be paid to tenants at the property, in connection with the actual condemnation.

We expect the condemnation process to take several years and estimate these costs to be approximately $45.5 million .

Off-Balance Sheet Arrangements

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Our investment in these ventures at December 31, 2020 was $18.7 million.

Other than the items disclosed in the Contractual Commitments Table, we have no off-balance sheet arrangements as of December 31, 2019 that are reasonably likely to have a current or future material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Other than the items disclosed in the Cash Requirements table, we have no off-balance sheet arrangements as of December 31, 2020 that are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements, or capital resources.

Debt Financing Arrangements

The following is a summary of our total debt outstanding as of December 31, 2020:

Description of Debt

Principal Balance as of December 31, 2019

Stated Interest Rate as of December 31, 2019

Maturity Date

Description of Debt Original

Issued Principal Balance as of December 31, 2020 Stated Interest Rate as of December 31, 2020 Maturity Date

(Dollars in thousands)

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Secured fixed rate

The Shops at Sunset Place

September 1, 2020

January 31, 2021

Sylmar Towne Center

Plaza Del Sol

December 1, 2021

THE AVENUE at White Marsh

January 1, 2022

Montrose Crossing

January 10, 2022

November 1, 2025

August 1, 2026

Plaza El Segundo

The Grove at Shrewsbury (East)

September 1, 2027

Hoboken (24 Buildings) (1)

LIBOR + 1.95%

December 15, 2029

Various Hoboken (12 Buildings)

Various through 2029

January 15, 2031

Hoboken (1 Building) (2)

Sylmar Towne Center Acquired $ 16,236 5.39 % June 6, 2021

Plaza Del Sol Acquired 8,041 5.23 % December 1, 2021

THE AVENUE at White Marsh 52,705 52,705 3.35 % January 1, 2022

Montrose Crossing 80,000 65,596 4.20 % January 10, 2022

Azalea Acquired 40,000 3.73 % November 1, 2025

Bell Gardens Acquired 12,408 4.06 % August 1, 2026

Plaza El Segundo 125,000 125,000 3.83 % June 5, 2027

The Grove at Shrewsbury (East) 43,600 43,600 3.77 % September 1, 2027

Brook 35 11,500 11,500 4.65 % July 1, 2029

Hoboken (24 Buildings) (1) 56,450 56,450 LIBOR + 1.95% December 15, 2029

Various Hoboken (14 Buildings) Acquired 32,705 Various (2) Various through 2029

Chelsea Acquired 5,234 5.36 % January 15, 2031

Hoboken (1 Building) (3) Acquired 16,560 3.75 % July 1, 2042

Subtotal 486,035

Net unamortized premium and debt issuance costs (1,924)

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Notes payable

Revolving credit facility (4)

LIBOR + 0.775%

January 19, 2024

Various through 2028

Term Loan 400,000 400,000 LIBOR + 1.35% May 6, 2021

Revolving credit facility (4) 1,000,000 — LIBOR + 0.775% January 19, 2024

Various 7,239 3,270 11.31 % Various through 2028

Subtotal 403,270

Net unamortized debt issuance costs (494)

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Unsecured fixed rate

January 15, 2021

August 1, 2022

January 15, 2024

7.48% debentures

August 15, 2026

July 15, 2027

6.82% medium term notes

August 1, 2027

June 15, 2029

December 1, 2044

August 1, 2046

2.75% notes 275,000 275,000 2.75 % June 1, 2023

3.95% notes 600,000 600,000 3.95 % January 15, 2024

1.25% notes 400,000 400,000 1.25 % February 15, 2026

7.48% debentures 50,000 29,200 7.48 % August 15, 2026

3.25% notes 475,000 475,000 3.25 % July 15, 2027

6.82% medium term notes 40,000 40,000 6.82 % August 1, 2027

3.20% notes 400,000 400,000 3.20 % June 15, 2029

3.50% notes 400,000 400,000 3.50 % June 1, 2030

4.50% notes 550,000 550,000 4.50 % December 1, 2044

3.625% notes 250,000 250,000 3.625 % August 1, 2046

Subtotal 3,419,200

Net unamortized discount and debt issuance costs (14,712)

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1) On November 26, 2019, we entered into two interest rate swap agreements that fix the interest rate on the mortgage loan at 3.67%.

2) The interest rates on these mortgages range from 3.91% to 5.00%.

3) This mortgage loan has a fixed interest rate, however, the rate resets every five years until maturity.

The current interest rate is fixed until July 1, 2022, and the loan is prepayable at par anytime after this date.

The interest rates on these mortgages range from 3.91% to 5.00%.

4) The maximum amount drawn under our revolving credit facility during 2020 was $990.0 million and the weighted average effective interest rate on borrowings under our revolving credit facility, before amortization of debt fees, was 1.5%.

Our revolving credit facility and other debt agreements include financial and other covenants that may limit our operating activities in the future.

As of December 31, 2019 , we were in compliance with all of the financial and other covenants related to our revolving credit facility and senior notes.

Additionally, as of December 31, 2019 , we were in compliance with all of the financial and other covenants that could trigger loan default on our mortgage loans.

Our revolving credit facility, unsecured term loan, and other debt agreements include financial and other covenants that may limit our operating activities in the future.

As of December 31, 2020, we were in compliance with all of the financial and other covenants related to our revolving credit facility, term loan, and senior notes.

Additionally, we were in compliance with all of the financial and other covenants that could trigger loan default on our mortgage loans.

If we were to breach any of these financial and other covenants and did not cure the breach within an applicable cure period, our lenders could require us to repay the debt immediately and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan.

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The following is a summary of our scheduled principal repayments as of December 31, 2020:

Unsecured Secured Total

(In thousands)

2021 $ 400,676 (1) $ 28,101 $ 428,777

2022 751 119,706 120,457

2023 275,765 3,549 279,314

2024 600,656 (2) 3,688 604,344

2025 333 48,033 48,366

Thereafter 2,544,289 282,958 2,827,247

$ 3,822,470 $ 486,035 $ 4,308,505 (3)

_____________________

1) Our $400.0 million term loan matures on May 6, 2021 plus one twelve month extension, at our option.

2) Our $1.0 billion revolving credit facility matures on January 19, 2024, plus two six-month extensions at our option.

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Effectiveness of cash flow hedges is assessed both at inception and on an ongoing basis.

The effective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recorded in other comprehensive income (loss) which is included in accumulated other comprehensive income (loss) on the balance sheet and statement of shareholders' equity.

The effective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recorded in other comprehensive income (loss) which is included in "accumulated other comprehensive loss" on the balance sheet and statement of shareholders' equity.

Cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and LIBOR rate.

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If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recognized in earnings in the period affected.

During 2019 , we entered into two interest rate swap agreements that effectively fix the interest rate on a mortgage payable associated with our Hoboken acquisition at 3.67% .

As of December 31, 2020, we have two interest rate swap agreements that effectively fix the interest rate on a mortgage payable associated with our Hoboken portfolio at 3.67%.

Our Assembly Row hotel joint venture is also a party to two interest rate swap agreements that effectively fix the interest rate on the joint venture's mortgage debt at 5.206%.

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Year Ended December 31,

2020 2019 2018

(In thousands, except per share data)

Net income $ 135,888 $ 360,542 $ 249,026

Net income attributable to noncontrolling interests (4,182) (6,676) (7,119)

Gain on sale of real estate and change in control of interests, net

Gain on sale of real estate, net of tax (91,922) (116,393) (11,915)

Impairment charge, net 50,728 — —

Depreciation and amortization of real estate assets 228,850 215,139 213,098

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_____________________

For the year ended December 31, 2019, FFO available for common shareholders includes an $11.9 million charge relating to the buyout of a lease at Assembly Square Marketplace.

If this charge was excluded, our FFO available for common shareholders for 2019 would have been $477.7 million, and FFO available for common shareholders, per diluted share would have been $6.33.

(1) For the years ended December 31, 2019 and 2018, dividends on our Series 1 preferred stock were not deducted in the calculation of FFO available to common shareholders, as the related shares were dilutive and included in "weighted average common shares, diluted."

(2) For the year ended December 31, 2020, FFO available for common shareholders includes a $11.2 million charge related to early extinguishment of debt.

If this charge was excluded, our FFO available for common shareholders for 2020 would have been $345.0 million, and FFO available for common shareholders, per diluted share would have been $4.52.

For the year ended December 31, 2019, FFO available for common shareholders includes an $11.9 million charge relating to the buyout of a lease at Assembly Square Marketplace.

If this charge was excluded, our FFO available for common shareholders for 2019 would have been $477.7 million, and FFO available for common shareholders, per diluted share would have been $6.33.

(3) The weighted average common shares used to compute FFO per diluted common share also includes operating partnership units that were excluded from the computation of diluted EPS.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis