1 unchanged sentence
We are exposed to risks associated with market changes in interest rates.
−Removed: We manage our exposure to this market risk by monitoring available financing alternatives.
+Added: We manage our exposure to this market risk by monitoring available financing alternatives, including fixed rate debt, and employing derivative instruments, including interest rate caps, to limit our exposure to increasing interest rates.
Other than as described below, we do not currently expect any significant changes in our exposure to fluctuations in interest rates or in how we manage this exposure in the near future.
1 unchanged sentence
At December 31, 2023, our outstanding floating rate debt consisted of the following:
−Removed: Annual Annual Interest
+Added: Annual Interest
Principal Interest Interest Payments
−Removed: Debt Balance (1)
ILPT Floating Rate Loan $ 1,235,000 6.18 % $ 77,383 2024 Monthly
1 unchanged sentence
$ 2,635,000 $ 164,963
−Removed: (1) The principal balance, annual interest rate and annual interest expense are the amounts stated in the applicable contract, as adjusted by our interest rate caps as applicable.
−Removed: In accordance with GAAP, our carrying values and recorded interest expense may differ from these amounts because of market conditions at the time we assumed or issued this debt.
−Removed: At December 31, 2022, our aggregate floating rate debt was $2,635,000, consisting of the $1,400,000 outstanding principal amount of the Floating Rate Loan secured by 82 properties owned by our consolidated joint venture and the $1,235,000 outstanding principal amount of the ILPT Floating Rate Loan.
−Removed: The ILPT Floating Rate Loan matures on October 9, 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 3.93%.
+Added: (1) The annual interest rate is the rate stated in the applicable contract, as adjusted by our interest rate caps.
+Added: At December 31, 2023, our aggregate floating rate debt was $2,635,000, consisting of the $1,235,000 outstanding principal amount of the ILPT Floating Rate Loan and the $1,400,000 outstanding principal amount of the Floating Rate Loan.
+Added: The ILPT Floating Rate Loan matures on October 9, 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a weighted average premium of 3.93%.
The Floating Rate Loan matures on March 9, 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 2.77%.
We are vulnerable to changes in the U.S.
−Removed: dollar based short term rates, specifically SOFR.
+Added: dollar based on short term rates, specifically SOFR.
In conjunction with these borrowings, to hedge our exposure to risks related to changes in SOFR rates, we purchased interest rate caps with a SOFR strike rate equal to 2.25% for the ILPT Floating Rate Loan and 3.40% for the Floating Rate Loan.
−Removed: In addition, upon renewal or refinancing of these obligations, we are vulnerable to increases in interest rate premiums due to market conditions or our perceived credit risk.
+Added: In addition, upon renewal or refinancing of these obligations, we are vulnerable to increases in interest rate premiums, including increases in the cost of replacement interest rate caps, due to market conditions and our perceived credit risk.
Generally, a change in interest rates would not affect the value of our floating rate debt but would affect our operating results.
5 unchanged sentences
At December 31, 2023
+Added: 6.17 % $ 2,635,000 $ 164,963 $ (2.52)
One percentage point increase 7.17 % $ 2,635,000 $ 191,679 $ (2.92)
(1) Based on the diluted weighted average common shares outstanding for the year ended December 31, 2023.
−Removed: The foregoing table shows the impact of an immediate one percentage point change in floating interest rates.
+Added: The foregoing table shows the impact of an immediate one percentage point change in floating interest rates, excluding the impact of our interest rate caps.
If interest rates were to change gradually over time, the impact would be spread over time.
Our exposure to fluctuations in floating interest rates will increase or decrease in the future with increases or decreases in the outstanding amounts of any floating rate debt we may incur.
+Added: Tabl e of Contents
Fixed Rate Debt
−Removed: As of December 31, 2022, our outstanding fixed rate debt consisted of the following mortgage notes:
−Removed: Annual Annual Interest
+Added: At December 31, 2023, our outstanding fixed rate debt consisted of the following mortgage notes:
+Added: Annual Interest
Principal Interest Interest Payments
−Removed: Debt Balance (1)
Mortgage notes (186 Hawaii Properties)
20 unchanged sentences
49,313 3.25 % 1,603 2038 Monthly
−Removed: Mortgage note (2)
−Removed: 42,087 2.95 % 1,242 2036 Monthly
−Removed: Mortgage note (2)
−Removed: 46,109 4.27 % 1,969 2037 Monthly
−Removed: Mortgage note (2)
−Removed: 52,031 3.25 % 1,691 2038 Monthly
$ 1,690,944 $ 73,795
−Removed: (1) The principal balance, annual interest rate and annual interest expense are the amounts stated in the applicable contract.
−Removed: In accordance with GAAP, our carrying values and recorded interest expense may differ from these amounts because of market conditions at the time we assumed or issued this debt.
−Removed: (2) Our consolidated joint venture, in which we have a 61% equity interest, assumed these former MNR mortgages, which are secured by 11 properties in aggregate.
+Added: (1) The annual interest rate is the rate stated in the applicable contract.
+Added: (2) Our consolidated joint venture, in which we own a 61% equity interest, obtained this mortgage loan, which is secured by four properties.
+Added: (3) Our consolidated joint venture, in which we own a 61% equity interest, assumed these former MNR mortgage loans, which are secured by eight properties in aggregate.
Our $650,000, $700,000 and $91,000 mortgage notes require interest only payments until maturity.
4 unchanged sentences
Increases in market interest rates decrease the fair value of our fixed rate debt, while decreases in market interest rates increase the fair value of our fixed rate debt.
−Removed: Federal Reserve has raised interest rates multiple times since the beginning of 2022 in an effort to combat inflation and may continue to do so.
−Removed: Based on the balances outstanding at December 31, 2022 and discounted cash flow analyses through the maturity date, and assuming no other changes in factors that may affect the fair value of our fixed rate debt obligation, a hypothetical immediate one percentage point change in the interest rates would change the fair value of this obligation by approximately $92,473.
+Added: In response to significant and prolonged increases in inflation, the U.S.
+Added: Federal Reserve has raised interest rates multiple times since the beginning of 2022.
+Added: Although the U.S.
+Added: Federal Reserve has indicated that it may lower interest rates in 2024, we cannot be sure that it will do so, and interest rates may remain at the current high levels or continue to increase.
+Added: Based on the balances outstanding at December 31, 2023 and assuming no other changes in factors that may affect the fair value of our fixed rate debt obligation, a hypothetical immediate one percentage point change in the interest rates would change the fair value of these obligations by approximately $87,358.
Financial Statements and Supplementary Data
2 unchanged sentences
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.