XML 31 R18.htm IDEA: XBRL DOCUMENT
v3.23.2

Derivative Instruments | 6 Months Ended
--- | ---
Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Derivative Instruments Our objectives in using derivatives are to add stability to interest expense and to manage our cash flow volatility and exposure to interest rate movements. To accomplish these objectives, we primarily use derivative instruments as part of our interest rate risk management strategy. Derivative instruments designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. We have interest rate swaps to manage our exposure to changes in the one-month LIBOR rate, the one-month term SOFR rate and the adjusted daily simple SOFR rate related to our Unsecured Term Loans. We have three interest rate swaps with an aggregate notional value of $200,000, that fix the one-month LIBOR rate at 0.99% and mature on February 2, 2026 (the "2021 Swaps"). On May 31, 2023, the Company amended its 2021 Unsecured Term Loan to replace LIBOR with SOFR as the benchmark interest rate. Commencing August 1, 2023, borrowings under the 2021 Unsecured Term Loan will bear interest at adjusted daily simple SOFR, plus a 10 basis point adjustment plus a credit spread which is currently 85 basis points. The 2021 Swaps will convert from fixing one-month LIBOR to fixing daily compounded SOFR commencing August 1, 2023. We have eight interest rate swaps with an aggregate notional value of $425,000 that fix the one-month term SOFR rate at 2.69% and mature on September 30, 2027 (the "2022 Swaps"). We have seven interest rate swaps, with an aggregate notional value of $300,000 that fix the adjusted daily simple SOFR rate at 3.93% (the "2022 II Swaps"). $150,000 of the 2022 II Swaps' aggregate notional value matures on December 1, 2025 and the remaining $150,000 of the 2022 II Swaps' aggregate notional value matures on August 1, 2027. We have designated the 2021 Swaps, the 2022 Swaps and the 2022 II Swaps as cash flow hedges. Our agreements with our derivative counterparties contain certain cross-default provisions that may be triggered in the event that our other indebtedness is in default, subject to certain thresholds. As of June 30, 2023, we had not posted any collateral related to these agreements and were not in breach of any of the provisions of these agreements. If we had breached these agreements, we could have been required to settle our obligations under the agreements at their termination value. The following table sets forth our financial assets related to the 2021 Swaps, the 2022 Swaps and the 2022 II Swaps, which are included in the line items Prepaid Expenses and Other Assets, Net or Accounts Payable, Accrued Expenses and Other Liabilities and are accounted for at fair value on a recurring basis as of June 30, 2023 and December 31, 2022:
|  |  |  | Fair Value Measurements:
Description |  | Fair Value at June 30, 2023 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Unobservable Inputs (Level 3)
Derivatives designated as a hedging instrument: |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |
2021 Swaps |  | $ | 17,447 |  |  | — |  |  | $ | 17,447 |  |  | — |
2022 Swaps |  | $ | 21,227 |  |  | — |  |  | $ | 21,227 |  |  | — |
2022 II Swaps |  | $ | 2,922 |  |  | — |  |  | $ | 2,922 |  |  | — |
|  | Fair Value at December 31, 2022 |  |  |  |  |  |
Derivatives designated as a hedging instrument: |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |
2021 Swaps |  | $ | 17,976 |  |  | — |  |  | $ | 17,976 |  |  | — |
2022 Swaps |  | $ | 19,057 |  |  | — |  |  | $ | 19,057 |  |  | — |
Liabilities: |  |  |  |  |  |  |  |
2022 II Swaps |  | $ | (253) |  |  | — |  |  | $ | (253) |  |  | — |
There was no ineffectiveness recorded on the 2021 Swaps, the 2022 Swaps or the 2022 II Swaps during the six months ended June 30, 2023. See Note 7 for more information regarding our derivatives. The estimated fair value of the 2021 Swaps, the 2022 Swaps and the 2022 II Swaps was determined using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments are incorporated in the fair value to account for potential non-performance risk, including our own non-performance risk and the respective counterparty's non-performance risk. We determined that the significant inputs used to value the 2021 Swaps, the 2022 Swaps and the 2022 II Swaps fell within Level 2 of the fair value hierarchy.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration