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Derivative Instruments | 9 Months Ended
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Sep. 30, 2025
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. During May 2025, in connection with the issuance of the 2031 Notes, we entered into two treasury locks with an aggregate notional value of $350,000 (the "2030 Treasury Locks") to manage our exposure to changes in the five-year U.S. Treasury rate. We paid approximately $250 to settle the 2030 Treasury Locks with our counterparties. The 2030 Treasury Locks effectively fixed the five-year U.S. Treasury rate at a weighted average of 4.12%. We designated the 2030 Treasury Locks as cash flow hedges and the settlement payment will be amortized into interest expense over the five-year hedge period (see Note 4). We use interest rate swaps to manage our exposure to changes in SOFR related to our unsecured term loans. All of our swaps have been designated as cash flow hedges. We have three interest rate swaps with an aggregate notional value of $200,000, that fix the SOFR rate component at 0.90% at September 30, 2025 and mature on February 2, 2026 (the "2021 Swaps"). During the three months ended September 30, 2025, we entered into three forward-starting swaps commencing February 2, 2026, with an aggregate notional value of $200,000 that fix SOFR at 3.15% and mature on February 1, 2029 (the "2026 Swaps"). We have eight interest rate swaps with an aggregate notional value of $425,000 that fix the SOFR rate component 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 SOFR rate component 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. During the three months ended September 30, 2025, we entered into three forward-starting swaps commencing December 1, 2025, with an aggregate notional value of $150,000 that fix SOFR at 3.19% and mature on December 1, 2028 (the "2025 Swaps" and together with the 2021 Swaps, the 2026 Swaps, the 2022 Swaps and the 2022 II Swaps, the "Swaps"). Our agreements with our derivative counterparties contain cross-default provisions, which may be triggered if we default on other indebtedness, subject to certain thresholds. As of September 30, 2025, we had not posted any collateral under these agreements and were in compliance with all contractual provisions of these agreements. In the event of a breach, we could be required to settle our obligations at the termination values within the agreements. The following table sets forth our financial assets and liabilities related to the Swaps, which are included in the line items Prepaid Expenses and Other Assets, Net or Accounts Payable, Accrued Expenses and Other Liabilities on the Consolidated Balance Sheets and are accounted for at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:
|  |  |  | Fair Value Measurements:
Description |  | Fair Value at September 30, 2025 |  | 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 |  | $ | 2,082 |  |  | — |  |  | $ | 2,082 |  |  | — |
2022 Swaps |  | $ | 5,408 |  |  | — |  |  | $ | 5,408 |  |  | — |
2025 Swaps |  | $ | 265 |  |  | — |  |  | $ | 265 |  |  | — |
2026 Swaps |  | $ | 406 |  |  | — |  |  | $ | 406 |  |  | — |
Liabilities: |  |  |  |  |  |  |  |
2022 II Swaps |  | $ | (1,045) |  |  | — |  |  | $ | (1,045) |  |  | — |
|  | Fair Value at December 31, 2024 |  |  |  |  |  |
Derivatives designated as a hedging instrument: |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |
2021 Swaps |  | $ | 6,902 |  |  | — |  |  | $ | 6,902 |  |  | — |
2022 Swaps |  | $ | 14,461 |  |  | — |  |  | $ | 14,461 |  |  | — |
2022 II Swaps |  | $ | 896 |  |  | — |  |  | $ | 896 |  |  | — |
There was no ineffectiveness recorded on the Swaps during the nine months ended September 30, 2025. See Note 7 for more information regarding our derivatives. The estimated fair value of the 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 Swaps fell within Level 2 of the fair value hierarchy.

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