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DERIVATIVE INSTRUMENTS, HEDGING ACTIVITIES AND OTHER COMPREHENSIVE INCOME | 6 Months Ended
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Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS, HEDGING ACTIVITIES AND OTHER COMPREHENSIVE INCOME | DERIVATIVE INSTRUMENTS, HEDGING ACTIVITIES AND OTHER COMPREHENSIVE INCOME In order to manage potential future variable interest rate risk, we enter into interest rate derivative agreements from time to time. We do not use interest rate derivative agreements for trading or speculative purposes. The agreements with each of our derivative counterparties provide that, in the event of default on any of our indebtedness, we could also be declared in default on our derivative obligations. As of June 30, 2022, we were party to 12 cash flow derivative agreements with notional amounts totaling $720.0 million, which includes $470.0 million of interest rate swaps assumed in connection with the Merger. These derivative agreements effectively fix the interest rate underlying certain variable rate debt instruments over expiration dates through 2026. Using a weighted average interest rate spread over LIBOR on all variable rate debt resulted in fixing the weighted average interest rate at 3.72%. As of June 30, 2022, we were also party to two fair value derivative agreements with notional amounts totaling $155.0 million that swap a blended fixed rate of 4.52% for a blended floating rate of LIBOR plus 3.70% with an expiration date of September 10, 2025. In December 2021, we entered into two forward-starting interest rate swap contracts with notional amounts totaling $150.0 million that swap a floating rate of compound SOFR for a fixed rate of 1.356% with an effective date of October 1, 2022 and an expiration date of June 1, 2032. As of June 30, 2022, the estimated fair value of the forward-starting swaps represented an asset of $18.6 million and is reflected within “Prepaid and other assets” in the accompanying consolidated balance sheets. As of June 30, 2022, the estimated fair value of our interest rate derivatives represented an asset of $10.3 million and a liability of $12.6 million, including accrued interest of $0.8 million. The derivative assets are reflected within “Prepaid and other assets” and the derivative liabilities are reflected within “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets. As of December 31, 2021, the estimated fair value of our interest rate derivatives represented a liability of $35.7 million, including accrued interest of $1.0 million, which is reflected within “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to earnings over time as the hedged items are recognized in earnings. Approximately $3.3 million and $1.1 million was reclassified as a reduction to earnings during the three months ended June 30, 2022 and 2021, respectively. Approximately $7.4 million and $2.4 million was reclassified as a reduction to earnings during the six months ended June 30, 2022 and 2021, respectively. As interest payments on our derivatives are made over the next 12 months, we estimate the decrease to interest expense to be $10.9 million, assuming the current LIBOR and SOFR curves. Unrealized gains and losses on our interest rate derivative agreements are the only components of the change in accumulated other comprehensive loss.

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- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
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