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Derivative Instruments | 9 Months Ended
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Sep. 30, 2024
Interest Rate Derivatives [Abstract] |
Derivative Instruments | 15. Derivative Instruments The Partnership’s derivative instruments are not designated as hedging instruments and are recorded at fair value. Changes in fair value are included in current period earnings as “Net result from derivative transactions” in the Partnership's condensed consolidated statements of operations, with gains reported as a reduction to expenses. The following tables are a summary of the unrealized and realized gains and losses of the Partnership's derivative instruments for the three and nine months ended September 30, 2024 and 2023:
|  | For the Three Months ended September 30, 2024 |  |  | For the Nine Months ended September 30, 2024 |
|  | Realized (gains) losses on derivatives, net |  |  | Unrealized (gains) losses on derivatives, net |  |  | Net result from derivative transactions |  |  | Realized (gains) losses on derivatives, net |  |  | Unrealized (gains) losses on derivatives, net |  |  | Net result from derivative transactions |
Interest rate swaps |  | $ | (1,812,945 | ) |  | $ | 9,695,459 |  |  | $ | 7,882,514 |  |  | $ | (5,150,745 | ) |  | $ | 4,880,396 |  |  | $ | (270,349 | )
Interest rate cap |  |  | 14,502 |  |  |  | - |  |  |  | 14,502 |  |  |  | 14,502 |  |  |  | 265 |  |  |  | 14,767 |
Total |  | $ | (1,798,443 | ) |  | $ | 9,695,459 |  |  | $ | 7,897,016 |  |  | $ | (5,136,243 | ) |  | $ | 4,880,661 |  |  | $ | (255,582 | )
|  | For the Three Months ended September 30, 2023 |  |  | For the Nine Months ended September 30, 2023 |
|  | Realized (gains) losses on derivatives, net |  |  | Unrealized (gains) losses on derivatives, net |  |  | Net result from derivative transactions |  |  | Realized (gains) losses on derivatives, net |  |  | Unrealized (gains) losses on derivatives, net |  |  | Net result from derivative transactions |
Interest rate swaps |  | $ | (1,681,013 | ) |  | $ | (4,312,984 | ) |  | $ | (5,993,997 | ) |  | $ | (3,783,987 | ) |  | $ | (6,911,481 | ) |  | $ | (10,695,468 | )
Interest rate cap |  |  | - |  |  |  | 76,387 |  |  |  | 76,387 |  |  |  | - |  |  |  | 90,587 |  |  |  | 90,587 |
Total return swaps |  |  | (1,291,775 | ) |  |  | - |  |  |  | (1,291,775 | ) |  |  | (3,935,115 | ) |  |  | - |  |  |  | (3,935,115 | )
Total |  | $ | (2,972,788 | ) |  | $ | (4,236,597 | ) |  | $ | (7,209,385 | ) |  | $ | (7,719,102 | ) |  | $ | (6,820,894 | ) |  | $ | (14,539,996 | )
The value of the Partnership’ interest rate swaps are subject to mark-to-market collateral posting provisions in conjunction with the Partnership’s respective ISDA master agreements (Note 13). See Note 20 for a description of the methodology and significant assumptions for determining the fair value of the derivatives. The derivative instruments are presented within “Other assets” and “Accounts payable, accrued expenses and other liabilities” in the Partnership's condensed consolidated balance sheets. The Partnership has entered into multiple interest rate swap agreements with large financial institutions to mitigate interest rate risk associated with variable rate TOB trust financings (Note 13). No fees were paid to the counterparties upon closing of the interest rate swaps. The Partnership has entered into an interest rate cap agreement to mitigate our exposure to interest rate risk associated with a variable-rate debt financing facility. The following tables summarize the Partnership’s derivative instruments as of September 30, 2024 and December 31, 2023:
|  |  |  |  | Fair Value as of September 30, 2024 |  |  |  |
Contract Type |  | Notional Amount |  |  | Asset |  |  | Liability |  |  | Weighted Average Remaining Maturity (Years) |
Swaps |  |  |  |  |  |  |  |  |  |  |  |
SOFR |  |  | 392,782,208 |  |  | $ | 2,704,180 |  |  | $ | (3,166,639 | ) |  |  | 2.94 |
Cap |  |  |  |  |  |  |  |  |  |  |  |
4.5% SIFMA Rate Cap |  |  | 65,602,587 |  |  |  | - |  |  |  | - |  |  |  | 0.25 |
|  |  | 458,384,795 |  |  | $ | 2,704,180 |  |  | $ | (3,166,639 | ) |  |  |
|  |  |  |  | Fair Value as of December 31, 2023 |  |  |  |
Contract Type |  | Notional Amount |  |  | Asset |  |  | Liability |  |  | Weighted Average Remaining Maturity (Years) |
Swaps |  |  |  |  |  |  |  |  |  |  |  |
SOFR |  |  | 333,250,226 |  |  | $ | 5,254,398 |  |  | $ | (705,694 | ) |  |  | 3.48 |
Cap |  |  |  |  |  |  |  |  |  |  |  |
4.5% SIFMA Rate Cap |  |  | 73,393,729 |  |  |  | 265 |  |  |  | - |  |  |  | 0.67 |
|  |  | 406,643,955 |  |  | $ | 5,254,663 |  |  | $ | (705,694 | ) |  |  |
The following table summarizes the average notional amount and weighted average fixed rate by year for our interest rate swaps as of September 30, 2024:
Year |  | Average Notional |  |  | Weighted Average Fixed Rate Paid |
Remainder of 2024 |  | $ | 406,596,769 |  |  |  | 3.54 | %
2025 |  |  | 327,531,631 |  |  |  | 3.40 | %
2026 |  |  | 277,393,799 |  |  |  | 3.37 | %
2027 |  |  | 191,995,466 |  |  |  | 3.45 | %
2028 |  |  | 155,697,132 |  |  |  | 3.55 | %
2029 |  |  | 119,142,299 |  |  |  | 3.47 | %
2030 |  |  | 19,392,800 |  |  |  | 3.77 | %
2031 |  |  | 11,799,667 |  |  |  | 3.79 | %
2032 |  |  | 9,583,000 |  |  |  | 3.71 | %
2033 |  |  | 6,577,667 |  |  |  | 3.84 | %
2034 |  |  | 2,537,500 |  |  |  | 3.91 | %

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- 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
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