XML 22 R13.htm IDEA: XBRL DOCUMENT
v3.23.3

Derivatives | 9 Months Ended
--- | ---
Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Derivatives As of September 30, 2023 and December 31, 2022 the Company had the following derivatives that were designated as cash flow hedges of interest rate risk (in thousands):
|  |  |  |  |  |  |  |  |  |  |  |  |  | Fair Value of Assets (Liabilities)
Hedged Debt |  | Type |  | Fixed Rate |  | Index |  | Effective Date |  | Maturity Date |  | Notional Amount |  | September 30, 2023 |  | December 31, 2022
Senior unsecured term loans |  | Swap (1) |  | 2.21 | % |  | SOFR |  | December 28, 2022 |  | October 18, 2023 |  | $ | 25,000 |  |  | $ | 37 |  |  | $ | 517 |
Senior unsecured term loans |  | Swap (1) |  | 2.21 | % |  | SOFR |  | December 28, 2022 |  | October 18, 2023 |  | $ | 25,000 |  |  | 37 |  |  | 515 |
Senior unsecured term loans |  | Swap (1) |  | 1.63 | % |  | SOFR |  | November 28, 2022 |  | July 25, 2024 |  | $ | 87,500 |  |  | 2,624 |  |  | 3,979 |
Senior unsecured term loans |  | Swap (1) |  | 1.63 | % |  | SOFR |  | November 28, 2022 |  | July 25, 2024 |  | $ | 87,500 |  |  | 2,621 |  |  | 3,976 |
Senior unsecured term loans |  | Swap |  | 3.36 | % |  | SOFR |  | March 1, 2023 |  | January 1, 2028 |  | $ | 75,000 |  |  | 2,892 |  |  | — |
Senior unsecured term loans |  | Swap |  | 3.50 | % |  | SOFR |  | March 1, 2023 |  | January 1, 2027 |  | $ | 75,000 |  |  | 2,277 |  |  | — |
|  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 10,488 |  |  | $ | 8,987 |
______________________ (1)Swap was designated as cash flow hedge as of April 1, 2023. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Derivative assets are included in prepaid expenses and other assets and derivative liabilities are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets. The changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2023, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the variable-rate debt. The fair value of our interest rate swaps is a Level 2 measurement under the fair value hierarchy. We estimate the fair value of the interest rate swap based on the interest rate yield curve and implied market volatility as inputs and adjusted for the counterparty's credit risk. We concluded the inputs for the credit risk valuation adjustment are Level 3 inputs; however these inputs are not significant to the fair value measurement in its entirety. The table below details the location in the consolidated financial statements of the gains and losses recognized on derivative financial statements for the three and nine months ended September 30, 2023 and 2022 (in thousands):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Effect of derivative instruments | Location in Statements of Operations and Comprehensive Income | 2023 |  | 2022 |  | 2023 |  | 2022
Gain recognized in other comprehensive income | Unrealized loss on interest rate derivative instruments | $ | 150 |  |  | $ | — |  |  | $ | 3,533 |  |  | $ | — |
Interest income for derivatives that were designated as cash flow hedges | Interest expense | $ | (2,694) |  |  | $ | — |  |  | $ | (5,235) |  |  | $ | — |
Interest (income) expense for derivatives that were not designated as cash flow hedges | Interest expense | $ | — |  |  | $ | (3,972) |  |  | $ | 469 |  |  | $ | (12,615) |
During the next twelve months, the Company estimates that $4.1 million will be reclassified from other comprehensive income as a decrease to interest expense.

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