XML 25 R19.htm IDEA: XBRL DOCUMENT
v3.25.1

Derivatives | 3 Months Ended
--- | ---
Mar. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Note 10 – Derivatives We use forward currency contracts to economically hedge interest and principal payments due under our loans denominated in currencies other than USD. We have entered into a series of forward contracts to sell an amount of foreign currency (GBP, EUR and SEK) for an agreed upon amount of USD at various dates through March 2028. These forward contracts were executed to economically fix the USD amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments. The agreements with our derivative counterparties require that we post collateral to secure net liability positions. As of both March 31, 2025 and December 31, 2024, we were in a net asset position with all of our derivative counterparties and did not have any collateral posted under these derivative contracts. The following table summarizes our non-designated Fx forwards and interest rate caps as of March 31, 2025:
|  | March 31, 2025 |
Type of Derivatives |  | Number of Contracts |  |  | Aggregate Notional Amount (in thousands) |  |  | Notional Currency |  | Maturity |  | Weighted-Average Years to Maturity |
Fx contracts - GBP |  |  | 88 |  |  |  | 626,454 |  |  | GBP |  | April 2025 - March 2028 |  |  | 1.44 |
Fx contracts - EUR |  |  | 44 |  |  |  | 341,860 |  |  | EUR |  | April 2025 - August 2026 |  |  | 0.98 |
Fx contracts - SEK |  |  | 13 |  |  |  | 617,606 |  |  | SEK |  | May 2025 - May 2026 |  |  | 1.10 |
Interest rate caps |  |  | 2 |  |  |  | 238,535 |  |  | USD |  | July 2025 - October 2025 |  |  | 0.43 |
The following table summarizes our non-designated Fx forwards and interest rate caps as of December 31, 2024:
|  | December 31, 2024 |
Type of Derivatives |  | Number of Contracts |  |  | Aggregate Notional Amount (in thousands) |  |  | Notional Currency |  | Maturity |  | Weighted-Average Years to Maturity |
Fx contracts - GBP |  |  | 80 |  |  |  | 632,702 |  |  | GBP |  | January 2025 - August 2027 |  |  | 1.39 |
Fx contracts - EUR |  |  | 48 |  |  |  | 355,218 |  |  | EUR |  | January 2025 - August 2026 |  |  | 1.18 |
Fx contracts - SEK |  |  | 14 |  |  |  | 633,231 |  |  | SEK |  | February 2025 - May 2026 |  |  | 1.32 |
Interest rate caps |  |  | 2 |  |  |  | 238,535 |  |  | USD |  | July 2025 - October 2025 |  |  | 0.67 |
We have not designated any of our derivative instruments as hedges as defined in ASC 815, "Derivatives and Hedging" and, therefore, changes in the fair value of our derivative instruments are recorded directly in earnings. The following table summarizes the amounts recognized on our condensed consolidated statements of operations related to our forward currency contracts for the three months ended March 31, 2025 and 2024 ($ in thousands):
|  |  |  | Amount of gain (loss) recognized in income |
|  |  |  | Three Months Ended March 31, |
|  | Location of Gain (Loss) Recognized in Income |  | 2025 |  |  | 2024 |
Forward currency contracts |  | Unrealized gain (loss) on derivative instruments |  | $ | (41,829 | ) |  | $ | 18,053 |
Forward currency contracts |  | Realized gain (loss) on derivative instruments |  |  | 2,857 |  |  |  | 5,345 |
Total |  |  |  | $ | (38,972 | ) |  | $ | 23,398 |
The following table summarizes the amounts recognized on our condensed consolidated statements of operations related to our interest rate caps for the three months ended March 31, 2025 and 2024 ($ in thousands):
|  |  |  | Amount of gain (loss) recognized in income |
|  |  |  | Three Months Ended March 31, |
|  | Location of Gain (Loss) recognized in Income |  | 2025 |  |  | 2024 |
Interest rate caps |  | Unrealized gain (loss) on interest rate hedging instruments |  | $ | (174 | ) |  | $ | (194 | )
Interest rate caps |  | Realized gain on interest rate hedging instruments |  |  | 132 |  |  |  | 550 |
Total |  |  |  | $ | (42 | ) |  | $ | 356 |
In September 2023, we entered into an interest rate cap with an original maturity of October 1, 2024 and a notional amount of $164.8 million. During September 2024, we extended our interest rate cap to October 1, 2025. We use our interest rate cap to hedge our exposure to variable cash flows on our construction financing. The interest rate cap effectively limits SOFR from exceeding 4.00% which results in the maximum all-in coupon on our construction financing of 6.55%. During both the three months ended March 31, 2025 and 2024, SOFR exceeded the cap rate of 4.00%. As such, during the three months ended March 31, 2025 and 2024, we realized a gain from the interest rate cap in the amount of $0.1 million and $0.6 million, respectively, which is included in gain (loss) on interest rate hedging instruments in our condensed consolidated statement of operations. In June 2024, we entered into an interest rate cap that matures on July 1, 2025 with a notional amount of $73.7 million. We use our interest rate cap to hedge our exposure to variable cash flows on our floating rate mortgage related to the D.C. Hotel. The interest rate cap effectively limits SOFR from exceeding 6.00% which results in the maximum all-in coupon on mortgage of 9.00%. During the three months ended March 31, 2025, SOFR did not exceed the cap rate of 6.00%, and accordingly, no realized gain was recorded. The following tables summarize the gross asset and liability amounts related to our derivatives at March 31, 2025 and December 31, 2024 ($ in thousands):
|  | March 31, 2025 |  |  | December 31, 2024 |
|  | Gross Amount of Recognized Assets |  |  | Gross Amounts Offset in our Consolidated Balance Sheet |  |  | Net Amounts of Assets Presented in our Consolidated Balance Sheet |  |  | Gross Amount of Recognized Assets |  |  | Gross Amounts Offset in our Consolidated Balance Sheet |  |  | Net Amounts of Assets Presented in our Consolidated Balance Sheet |
Forward currency contracts |  | $ | 27,481 |  |  | $ | (11,557 | ) |  | $ | 15,924 |  |  | $ | 59,261 |  |  | $ | (1,508 | ) |  | $ | 57,753 |
Interest rate caps |  |  | 243 |  |  |  | — |  |  |  | 243 |  |  |  | 416 |  |  |  | — |  |  |  | 416 |
Total derivative assets |  | $ | 27,724 |  |  | $ | (11,557 | ) |  | $ | 16,167 |  |  | $ | 59,677 |  |  | $ | (1,508 | ) |  | $ | 58,169 |

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