Derivatives

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The Company enters into derivatives in order to hedge interest rate risk. The Company had three interest rate swaps with aggregate notional amounts of $475.0 million as of December 31, 2020 and four interest rate swaps with aggregate notional amounts of $539.5 million as of December 31, 2019. These derivatives were designated as effective cash flow hedges for accounting purposes. The derivative assets are recorded in prepaid expenses and other assets and derivative liabilities are recorded in accounts payable, accrued liabilities and other on the Consolidated Balance Sheets.

On July 29, 2020, the Company entered into an interest rate cap contract, required by the lender, with respect to the Hollywood Media Portfolio loan due August 2022. The aggregate notional amount is $900.0 million as of December 31, 2020. The interest rate cap is not designated under hedge accounting and is accounted for under mark-to-market accounting.

The Company has agreements with its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.

The Company’s derivatives are classified as Level 2 and their fair values are derived from estimated values obtained from observable market data for similar instruments.

The fair market value of derivatives is presented on a gross basis on the Consolidated Balance Sheets. The following table summarizes the Company’s derivative instruments as of December 31, 2020 and December 31, 2019:


Underlying Debt Instrument	Number of Derivatives	Notional Amount		Effective Date	Maturity Date	Interest Rate Range(1)				Fair Value (Liabilities)/Assets
						Low		High		2020		2019
Interest rate swaps
Met Park North	1	$	64,500	August 2013	August 2020	3.71	%	3.71	%	$	—	$	(195)
Hollywood Media Portfolio (formerly Term Loan B)	2	350,000		April 2015	April 2022	2.96	%	3.46	%	(7,112)		(1,596)
Hollywood Media Portfolio (formerly Term Loan D)	1	125,000		June 2016	November 2022	2.63	%	3.13	%	(2,994)		479
Interest rate cap						Strike rate
Hollywood Media Portfolio	1	$	900,000	July 2020	August 2022	3.50%				$	5	$	—
TOTAL										$	(10,101)	$	(1,312)

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1.The rate is based on the fixed rate from the swap and the spread based on the operating partnership’s leverage ratio.

On July 31, 2020, the Company paid off the principal outstanding of $64.5 million on the Met Park North mortgage loan. The derivative on the Met Park North mortgage loan matured on August 1, 2020.

The Company reclassifies unrealized gains and losses related to cash flow hedges into earnings in the same period during which the hedged forecasted transaction affects earnings. As of December 31, 2020, the Company expects $7.3 million of unrealized loss included in accumulated other comprehensive income will be reclassified as an increase to interest expense in the next 12 months.