XML 43 R28.htm IDEA: XBRL DOCUMENT
v3.21.2

Financial Instruments: Derivatives and Hedging | 9 Months Ended
--- | ---
Sep. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments: Derivatives and Hedging | Financial Instruments: Derivatives and Hedging In the normal course of business, we use a variety of commonly used derivative instruments, such as interest rate swaps, caps, collars and floors, to manage, or hedge interest rate risk. We hedge our exposure to variability in future cash flows for forecasted transactions in addition to anticipated future interest payments on existing debt. We recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value through earnings. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedge asset, liability, or firm commitment through earnings, or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. Reported net income and equity may increase or decrease prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows. Currently, all of our designated derivative instruments are effective hedging instruments. The following table summarizes the notional value at inception and fair value of our consolidated derivative financial instruments as of September 30, 2021 based on Level 2 information. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands).
| Notional Value |  | Strike Rate |  | Effective Date |  | Expiration Date |  | Balance Sheet Location |  | Fair Value
Interest Rate Cap | $ | 111,869 |  |  | 3.500 | % |  | December 2020 |  | November 2021 |  | Other Assets |  | $ | — |
Interest Rate Swap | 200,000 |  |  | 0.138 | % |  | February 2021 |  | February 2022 |  | Other Liabilities |  | (27) |
Interest Rate Swap | 100,000 |  |  | 0.136 | % |  | February 2021 |  | February 2022 |  | Other Liabilities |  | (13) |
Interest Rate Cap | 85,000 |  |  | 4.000 | % |  | March 2021 |  | March 2022 |  | Other Assets |  | — |
Interest Rate Swap | 100,000 |  |  | 0.212 | % |  | January 2021 |  | January 2023 |  | Other Assets |  | 11 |
Interest Rate Swap | 400,000 |  |  | 0.160 | % |  | February 2021 |  | February 2023 |  | Other Assets |  | 86 |
Interest Rate Swap | 200,000 |  |  | 1.131 | % |  | July 2016 |  | July 2023 |  | Other Liabilities |  | (3,108) |
Interest Rate Swap | 100,000 |  |  | 1.161 | % |  | July 2016 |  | July 2023 |  | Other Liabilities |  | (1,609) |
Interest Rate Swap | 150,000 |  |  | 2.696 | % |  | January 2019 |  | January 2024 |  | Other Liabilities |  | (7,840) |
Interest Rate Swap | 150,000 |  |  | 2.721 | % |  | January 2019 |  | January 2026 |  | Other Liabilities |  | (11,990) |
Interest Rate Swap | 200,000 |  |  | 2.740 | % |  | January 2019 |  | January 2026 |  | Other Liabilities |  | (16,150) |
|  |  |  |  |  |  |  |  |  |  | $ | (40,640) |
No gains or losses on the changes in the fair values were included in interest expense in the consolidated statements of operations during the three and nine months ended September 30, 2021 or 2020. The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of September 30, 2021, the fair value of derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $41.9 million. As of September 30, 2021, the Company was not required to post any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $42.4 million as of September 30, 2021. Gains and losses on terminated hedges are included in accumulated other comprehensive income (loss), and are recognized into earnings over the term of the related mortgage obligation. Over time, the realized and unrealized gains and losses held in accumulated other comprehensive loss will be reclassified into earnings as an adjustment to interest expense in the same periods in which the hedged interest payments affect earnings. We estimate that $16.3 million of the current balance held in accumulated other comprehensive loss will be reclassified int interest expense and $4.1 million of the portion related to our share of joint venture accumulated other comprehensive loss will be reclassified into equity in net loss from unconsolidated joint ventures within the next 12 months. The following table presents the effect of our derivative financial instruments and our share of our joint ventures' derivative financial instruments that are designated and qualify as hedging instruments on the consolidated statements of operations for the three months ended September 30, 2021 and 2020, respectively (in thousands):
|  | Amount of Loss Recognized in Other Comprehensive Loss |  | Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income |  | Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income
|  | Three Months Ended September 30, |  |  | Three Months Ended September 30,
Derivative |  | 2021 |  | 2020 |  |  |  |  | 2021 |  | 2020 |  |
Interest Rate Swaps/Caps |  | $ | (450) |  |  | $ | (318) |  |  |  |  | Interest expense |  | $ | (4,416) |  |  | $ | (5,162) |  |  |
Share of unconsolidated joint ventures' derivative instruments |  | (143) |  |  | (199) |  |  |  |  | Equity in net loss from unconsolidated joint ventures |  | (2,792) |  |  | (1,454) |  |  |
|  | $ | (593) |  |  | $ | (517) |  |  |  |  |  |  | $ | (7,208) |  |  | $ | (6,616) |  |  |
The following table presents the effect of our derivative financial instruments and our share of our joint ventures' derivative financial instruments that are designated and qualify as hedging instruments on the consolidated statements of operations for the nine months ended September 30, 2021 and 2020, respectively (in thousands):
|  | Amount of Gain (Loss) Recognized in Other Comprehensive Loss |  | Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income |  | Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income
|  | Nine Months Ended September 30, |  |  | Nine Months Ended September 30,
Derivative |  | 2021 |  | 2020 |  |  |  |  | 2021 |  | 2020 |  |
Interest Rate Swaps/Caps |  | $ | 7,305 |  |  | $ | (52,808) |  |  |  |  | Interest expense |  | $ | (13,359) |  |  | $ | (9,610) |  |  |
Share of unconsolidated joint ventures' derivative instruments |  | (20,641) |  |  | (8,375) |  |  |  |  | Equity in net loss from unconsolidated joint ventures |  | (6,542) |  |  | (3,347) |  |  |
|  | $ | (13,336) |  |  | $ | (61,183) |  |  |  |  |  |  | $ | (19,901) |  |  | $ | (12,957) |  |  |
The following table summarizes the notional value at inception and fair value of our joint ventures' derivative financial instruments as of September 30, 2021 based on Level 2 information. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands).
| Notional Value |  | Strike Rate |  | Effective Date |  | Expiration Date |  | Classification |  | Fair Value
Interest Rate Cap | $ | 1,075,000 |  |  | 2.850 | % |  | September 2021 |  | September 2022 |  | Asset |  | $ | 2 |
Interest Rate Cap | 125,000 |  |  | 2.850 | % |  | September 2021 |  | September 2022 |  | Asset |  | — |
Interest Rate Cap | 1,250,000 |  |  | 1.250 | % |  | November 2020 |  | October 2024 |  | Asset |  | 5,005 |
Interest Rate Swap | 177,000 |  |  | 1.669 | % |  | March 2016 |  | February 2026 |  | Liability |  | (6,190) |
|  |  |  |  |  |  |  |  |  |  | $ | (1,183) |

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration