Quarterly report pursuant to Section 13 or 15(d)

Loans Payable

v3.21.1
Loans Payable
3 Months Ended
Mar. 31, 2021
Debt Disclosure [Abstract]  
Loans Payable Loans Payable
The Company’s loans payable consist of the following (in thousands, except monthly payment):
Property/Description Monthly Payment Interest
Rate
Maturity March 31,
2021
December 31,
 2020
 First National Bank (7)
$ 24,656 
LIBOR + 350 basis points
March 2021 $ 982  $ 1,045 
 Lumber River $ 10,723 
LIBOR + 350 basis points
April 2021 1,349  1,367 
 Rivergate $ 103,167 
LIBOR + 295 basis points
April 2021 21,021  21,164 
 JANAF Bravo $ 36,935  4.65  % April 2021 6,225  6,263 
 Columbia Fire Station Interest only 14.00  % July 2021 3,363  3,893 
 Litchfield Market Village $ 46,057  5.50  % November 2022 7,417  7,418 
 Twin City Commons $ 17,827  4.86  % January 2023 2,897  2,915 
 Walnut Hill Plaza $ 26,850  5.50  % March 2023 3,252  3,287 
 Powerscourt Financing Agreement (6)
Interest only 13.50  % March 2023 —  25,000 
 New Market $ 48,747  5.65  % June 2023 6,454  6,508 
 Benefit Street Note (3)
$ 53,185  5.71  % June 2023 7,088  7,145 
 Deutsche Bank Note (2)
$ 33,340  5.71  % July 2023 5,547  5,567 
 JANAF $ 333,159  4.49  % July 2023 48,423  48,875 
 Tampa Festival $ 50,797  5.56  % September 2023 7,878  7,920 
 Forrest Gallery $ 50,973  5.40  % September 2023 8,184  8,226 
 South Carolina Food Lions Note (5)
$ 68,320  5.25  % January 2024 11,418  11,473 
 Cypress Shopping Center $ 34,360  4.70  % July 2024 6,134  6,163 
 Port Crossing $ 34,788  4.84  % August 2024 5,876  5,909 
 Freeway Junction $ 41,798  4.60  % September 2024 7,544  7,582 
 Harrodsburg Marketplace $ 19,112  4.55  % September 2024 3,324  3,343 
 Bryan Station $ 23,489  4.52  % November 2024 4,290  4,312 
 Crockett Square Interest only 4.47  % December 2024 6,338  6,338 
 Pierpont Centre $ 39,435  4.15  % February 2025 7,965  8,001 
 Shoppes at Myrtle Park $ 33,180  4.45  % February 2025 5,858  5,892 
 Folly Road $ 41,482  4.65  % March 2025 7,183  7,223 
 Alex City Marketplace Interest only 3.95  % April 2025 5,750  5,750 
 Butler Square Interest only 3.90  % May 2025 5,640  5,640 
 Brook Run Shopping Center Interest only 4.08  % June 2025 10,950  10,950 
 Beaver Ruin Village I and II Interest only 4.73  % July 2025 9,400  9,400 
 Sunshine Shopping Plaza Interest only 4.57  % August 2025 5,900  5,900 
 Barnett Portfolio (4)
Interest only 4.30  % September 2025 8,770  8,770 
 Fort Howard Shopping Center Interest only 4.57  % October 2025 7,100  7,100 
 Conyers Crossing Interest only 4.67  % October 2025 5,960  5,960 
 Grove Park Shopping Center Interest only 4.52  % October 2025 3,800  3,800 
 Parkway Plaza Interest only 4.57  % October 2025 3,500  3,500 
 Winslow Plaza $ 24,295  4.82  % December 2025 4,535  4,553 
 JANAF BJ's $ 29,964  4.95  % January 2026 4,814  4,844 
 Tuckernuck $ 32,202  5.00  % March 2026 5,150  5,193 
 Wilmington Financing Agreement (6)
Interest only 8.00  % March 2026 35,000  — 
 Chesapeake Square $ 23,857  4.70  % August 2026 4,254  4,279 
 Berkley/Sangaree/Tri-County Interest only 4.78  % December 2026 6,176  9,400 
 Riverbridge Interest only 4.48  % December 2026 4,000  4,000 
 Franklin Village $ 45,336  4.93  % January 2027 8,372  8,404 
 Village of Martinsville $ 89,664  4.28  % July 2029 15,881  15,979 
 Laburnum Square Interest only 4.28  % September 2029 7,665  7,665 
Total Principal Balance (1)
358,627  353,916 
Unamortized debt issuance cost (1)
(9,349) (6,812)
Total Loans Payable, including assets held for sale 349,278  347,104 
Less loans payable on assets held for sale, net loan amortization costs 10,745  12,838 
Total Loans Payable, net $ 338,533  $ 334,266 
(1) Includes loans payable on assets held for sale, see Note 3.
(2) Collateralized by LaGrange Marketplace, Ridgeland and Georgetown.
(3) Collateralized by Ladson Crossing, Lake Greenwood Crossing and South Park.
(4) Collateralized by Cardinal Plaza, Franklinton Square, and Nashville Commons.
(5) Collateralized by Clover Plaza, South Square, St. George, Waterway Plaza and Westland Square.
(6) Collateralized by Darien Shopping Center, Devine Street, Lake Murray, Moncks Corner and South Lake.
(7) Collateralized by Surrey Plaza and Amscot Building.
Powerscourt Financing Agreement Payoff

On March 12, 2021, the Company paid in full the $25.00 million Powerscourt Financing Agreement. The Powerscourt Warrant Agreement and the Powerscourt Registration Rights Agreement remain.

Powerscourt Warrant Agreement

Pursuant to the Powerscourt Financing Agreement, the Company issued Powerscourt Investments XXII, LP, a warrant (the “Powerscourt Warrant”) to purchase 496,415 shares of Common Stock for $3.12 per share (the “Powerscourt Warrant Agreement”). The Powerscourt Warrant is exercisable at the option of its holder in whole or in part into shares of Common Stock from time to time on or after December 22, 2020 (the “Effective Date”) and before the date that is the 36-month anniversary of the Effective Date.

Wilmington Financing Agreement

On March 12, 2021, the Company entered into a financing agreement (the "Wilmington Financing Agreement") as borrower, certain subsidiaries of the Company from time to time party thereto, as guarantors (together with the Company, the “Loan Parties”), the lenders from time to time party thereto, and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent. The Wilmington Financing Agreement provides for a term loan in the aggregate principal of $35.00 million. The proceeds of the Wilmington Financing Agreement are intended for the following: (i) to paydown the Company’s indebtedness on the Powerscourt Financing Agreement, (ii) to fund the redemption of certain shares of the Company’s 8.75% Series D Preferred and (iii) to pay fees and expenses in connection with the transactions contemplated by the Wilmington Financing Agreement. The Wilmington Financing Agreement is at a rate of 8.00% and matures in March 2026 with quarterly interest only payments beginning on April 15, 2021. Any payment or repayment of principal will be made with a premium equal to 5% of the amount repaid or prepaid.

The obligations of the Company under the Wilmington Financing Agreement are secured by liens on certain assets of the Company and certain of the Company’s subsidiaries, including mortgages on the properties within the Company’s portfolio. The Wilmington Financing Agreement also contains covenants that restrict, among other things the ability of the Company and its subsidiaries to create liens, incur indebtedness, make certain investments, merge or consolidate, dispose of assets, pay certain dividends and make certain other restricted payments or certain equity issuances, change the nature of their businesses, enter into certain transactions with affiliates and change their governing documents.

Wilmington Warrant Agreement

Pursuant to Wilmington Financing Agreement, the Company issued to the holders from time to time party thereto a warrant (the “Wilmington Warrant”) to purchase in the aggregate, 1,061,719 shares of Common Stock in three tranches: warrants to purchase an aggregate of 510,204 shares at an exercise price of $3.430 per share ("Tranche A"); warrants to purchase an aggregate of 424,242 shares at an exercise price of $4.125 per share ("Tranche B"); and warrants to purchase an aggregate of 127,273 shares at an exercise price of $6.875 per share ("Tranche C") (the “Wilmington Warrant Agreement”). The Wilmington Warrant is exercisable at the option of its holder in whole or in part into shares of Common Stock from time to time on or after March 12, 2021 (the “Effective Date”) and before the maturity date of the Wilmington Financing Agreement.

Wilmington Registration Rights Agreement
In connection with the Wilmington Financing Agreement, the Company entered into a registration rights agreement with the holders from time to time of the Wilmington Warrants, dated as of March 12, 2021 (the “Wilmington Registration Rights Agreement”), pursuant to which the Company shall register the resale of the registrable securities on a Registration Statement on Form S-3 or Form S-11 within 60 days following the Effective Date.
Columbia Fire Station Forbearance Agreement

On January 21, 2021, the Company entered into a Forbearance Agreement (the "Forbearance Agreement") with Pinnacle Bank at an interest rate of 14% and made a $500 thousand principal payment. The Forbearance Agreement, among
other provisions, extends the maturity date of the Columbia Fire Station Loan to July 21, 2021 and waives all defaults and late fees existing prior to the Forbearance Agreement.

Tuckernuck Refinance

On February 2, 2021, the Company refinanced the Tuckernuck Loan for $5.15 million at a rate of 5.00%. The loan matures on March 1, 2026 with monthly principal and interest payments of $32 thousand.

Berkley/Sangaree/Tri-County Paydown

On March 25, 2021, the Company made a $3.22 million principal payment on the Berkley/Sangaree/Tri-County loan with the sale of the Berkley Shopping Center, as detailed in Note 3, and paid $687 thousand in defeasance.

Debt Maturity

The Company’s scheduled principal repayments on indebtedness as of March 31, 2021, including assets held for sale, are as follows (in thousands, unaudited):
For the remaining nine months ended December 31, 2021 $ 36,815 
December 31, 2022 12,675 
December 31, 2023 86,970 
December 31, 2024 44,340 
December 31, 2025 91,530 
December 31, 2026 58,025 
Thereafter 28,272 
    Total principal repayments and debt maturities $ 358,627 
 
The Company has considered its short-term (one year or less) liquidity needs and the adequacy of its estimated cash flows from operating activities and other expected financing sources to meet these needs. In particular, the Company has considered its scheduled debt maturities and scheduled principal payments for the twelve months ending March 31, 2022 of $38.19 million. The Company plans to pay this obligation through a combination of refinancings, dispositions and operating cash. All loans due to mature are collateralized by properties within the portfolio. Additionally, the Company expects to meet the short-term liquidity requirements, through a combination of the following:

continued suspension of Series A Preferred, Series B Preferred and Series D Preferred dividends;
available cash and cash equivalents;
cash flows from operating activities;
refinancing of maturing debt;
possible sale of five undeveloped land parcels; and
sale of additional properties, if necessary.

Fair Value of Warrants

The Company utilized the Monte Carlo simulation model to calculate the fair value of the Powerscourt Warrant and Wilmington Warrant (collectively, the "Warrant Agreements"). Significant observable and unobservable inputs include stock price, conversion price, annual risk free rate, term, likelihood of an event of contractual conversion and expected volatility. The Monte Carlo simulation is a Level 3 valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. The Warrant Agreements contains terms and features that give rise to derivative liability classification. The Company presents the Warrant Agreements' fair value as a liability included on the condensed consolidated balance sheets. In determining the initial fair value of the Wilmington Warrant, the Company used the following inputs in its Monte Carlo model; exercise price of each of the three tranches within the Wilmington Warrant Agreement as noted above, Common Stock price $3.75, contractual term to maturity 5.0 years, expected Common Stock volatility 54.72% and risk free interest rate 0.91%.
In measuring the warrant liability at March 31, 2021, the Company used the following inputs in its Monte Carlo Model:

Range of exercise prices
$3.120 - $6.875
Common Stock price $3.75
Weighted average contractual term to maturity (years) 4.24
Range of expected market volatility %
54.72% - 73.00%
Range of risk free interest rate
0.29% - 0.91%

The following table sets forth a summary of the changes in fair value of the Company's warrant liabilities (in thousands):

March 31, 2021
(unaudited)
Balance December 31, 2020 $ 594 
   Issuance of warrants 2,018 
   Changes in fair value 347 
Balance March 31, 2021 $ 2,959