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Interest Rate Contracts
 12 Months Ended
Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Interest Rate Contracts Interest Rate Contracts
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of debt funding and the use of derivative financial instruments. Specifically, the Company enters into interest rate swap agreements (collectively, “Interest Rate Swaps”) to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the values of which are determined by expected cash payments principally related to borrowings and interest rates. Interest Rate Swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company does not use derivatives for trading or speculative purposes.
Derivative Instruments
The Company entered into the Interest Rate Swaps to hedge the variable cash flows associated with its variable-rate debt, including the KeyBank Loans. The Interest Rate Swaps are cross-defaulted to other indebtedness of the Operating Partnership, if that indebtedness exceeds certain thresholds. The change in the fair value of the Interest Rate Swaps designated and qualifying as cash flow hedges is initially recorded in accumulated other comprehensive income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to Interest Rate Swaps will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt.
The following table sets forth a summary of the Interest Rate Swaps at December 31, 2023 and 2022:
Fair Value (1)
Current Notional Amounts
December 31,December 31,
Derivative InstrumentEffective DateMaturity DateInterest Strike Rate2023202220232022
Assets/(Liabilities)
Interest Rate Swap3/10/20207/1/20250.83%$7,891 $12,391 $150,000 $150,000 
Interest Rate Swap3/10/20207/1/20250.84%5,250 8,244 100,000 100,000 
Interest Rate Swap3/10/20207/1/20250.86%3,915 6,145 75,000 75,000 
Interest Rate Swap7/1/20207/1/20252.82%2,924 4,331 125,000 125,000 
Interest Rate Swap7/1/20207/1/20252.82%2,331 3,444 100,000 100,000 
Interest Rate Swap7/1/20207/1/20252.83%2,327 3,441 100,000 100,000 
Interest Rate Swap7/1/20207/1/20252.84%2,304 3,408 100,000 100,000 
Total$26,942 $41,404 $750,000 $750,000 
(1)The Company records all derivative instruments on a gross basis in the consolidated balance sheets, and accordingly there are no offsetting amounts that net assets against liabilities. As of December 31, 2023, derivatives in a liability position are included in an asset or liability position are included in the line item “Other assets or Interest rate swap liability,” respectively, in the consolidated balance sheets at fair value. The SOFR rate as of December 31, 2023 (effective date) was 5.46%.
The following table sets forth the impact of the Interest Rate Swaps on the consolidated statements of operations for the periods presented:
Year Ended December 31,
202320222021
Interest Rate Swaps in Cash Flow Hedging Relationship:
Amount of (loss) gain recognized in AOCI on derivatives $(9,295)$61,126 $(18,165)
Amount of (gain) loss reclassified from AOCI into earnings under “Interest expense” $23,630 $(2,056)$(14,284)
Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded$65,623 $84,816 $85,087 
During the twelve months subsequent to December 31, 2023, the Company estimates that an additional $26.9 million of its income will be recognized from AOCI into earnings.
As of December 31, 2023 and 2022, there were no Interest Rate Swaps in a liability position. As of December 31, 2023 and December 31, 2022, the Company had not posted any collateral related to these agreements.