Financial Instruments: Derivatives and Hedging

12 Months Ended

Dec. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments: Derivatives and Hedging

Financial Instruments: Derivatives and Hedging

In the normal course of business, we use a variety of commonly used derivative instruments, such as interest rate swaps, caps, collar and floors, to manage, or hedge interest rate risk. We hedge our exposure to variability in future cash flows for forecasted transactions in addition to anticipated future interest payments on existing debt.

The following table summarizes the notional and fair value of our consolidated derivative financial instruments at December 31, 2013 based on Level 2 information pursuant to ASC 810-10. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks (amounts in thousands).

	Notional Value		Strike Rate		Effective Date	Expiration Date	Balance Sheet Location	Fair Value
Interest Rate Cap	$	263,426	6.000	%	November 2013	November 2015	Other Assets	$	9
Interest Rate Cap	137,500		4.000	%	October 2013	September 2015	Other Assets	7
Interest Rate Swap	30,000		2.295	%	July 2010	June 2016	Other Liabilities	(1,293		)
Interest Rate Swap	8,500		0.740	%	February 2012	February 2015	Other Liabilities	(45		)
								$	(1,322	)

Certain interest rate caps are not designated as a hedging instruments and changes in the value are marked to market through earnings. During the year ended December 31, 2013, 2012 and 2011, we recorded a loss on the changes in the fair value of $16,000, $770,000 and $66,000, respectively, which is included in interest expense on the consolidated statements of income. Included in 2012 was approximately $0.7 million of change in fair value of a terminated currency hedge which was marked to market.

Gains and losses on terminated hedges are included in the accumulated other comprehensive loss, and are recognized into earnings over the term of the related mortgage obligation. Over time, the realized and unrealized gains and losses held in accumulated other comprehensive loss will be reclassified into earnings as an adjustment to interest expense in the same periods in which the hedged interest payments affect earnings.  We estimate that approximately $2.7 million of the current balance held in accumulated other comprehensive loss will be reclassified into interest expense and $5.0 million of the portion related to our share of joint venture accumulated other comprehensive loss will be reclassified into equity in net income from unconsolidated joint ventures within the next 12 months.

The following table presents the effect of our derivative financial instruments and our share of our joint ventures' derivative financial instruments that are designated and qualify as hedging instruments on the consolidated statements of income for the years ended December 31, 2013, 2012 and 2011, respectively (in thousands):

	Amount of Gain or (Loss) Recognized in Other Comprehensive Loss (Effective Portion)									Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of Loss  Reclassified from Accumulated Other Comprehensive Loss  into Income (Effective Portion)						Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain or  (Loss) or Recognized into Income (Ineffective Portion)
	Years Ended December 31,										Years Ended December 31,							Years Ended December 31,
Derivative	2013			2012			2011				2013		2012		2011			2013		2012		2011
Interest Rate Swaps/Caps	$	(68	)	(912		)	$	(5,699	)	Interest expense	$	1,933	1,865		$	1,554	Interest expense	$	3	3		$	(16	)
Share of unconsolidated joint ventures' derivative instruments	6,553			(9,637		)	(10,273		)	Equity in net income from unconsolidated joint ventures	5,072		10,811		11,072		Equity in net income from unconsolidated joint ventures	—		—		—
	$	6,485		$	(10,549	)	$	(15,972	)		$	7,005	$	12,676	$	12,626		$	3	$	3	$	(16	)