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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
 9 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
 
Information about our derivative financial instruments at September 30, 2024 and December 31, 2023 is as follows (dollars in thousands): 
Notional AmountFair Value
Contract dateEffective DateExpiration DateAverage Annual Effective Fixed RateSeptember 30, 2024December 31, 2023September 30, 2024December 31, 2023
Operating Partnership:
June 11, 2018September 28, 2018September 30, 20242.86 %$75,000 $75,000 $— $1,170 
June 11, 2018December 31, 2018December 31, 20252.92 %125,000 125,000 1,256 2,877 
July 26, 2022January 31, 2023January 31, 20272.60 %100,000 100,000 1,671 3,134 
July 26, 2022January 31, 2023January 31, 20292.56 %100,000 100,000 2,655 4,273 
Total Operating Partnership400,000 400,000 5,582 11,454 
GIC Joint Venture:
March 24, 2023July 1, 2023January 13, 20263.35 %100,000 100,000 329 1,250 
March 24, 2023July 1, 2023January 13, 20263.35 %100,000 100,000 330 1,254 
January 19, 2024October 1, 2024January 13, 20263.77 %100,000 (1)— (190)— 
Total GIC Joint Venture
300,000 200,000 469 2,504 
Total
$700,000 $600,000 $6,051 $13,958 

(1)     At December 31, 2023, we had interest rate swaps that were in effect with a notional amount totaling $600.0 million. In January, 2024, we executed one additional interest rate swap with a notional amount totaling $100.0 million that became effective on October 1, 2024.

At September 30, 2024, debt related to our wholly-owned properties and our pro rata share of joint venture debt has a fixed-rate debt ratio of approximately 77% of our total pro rata indebtedness when taking into consideration interest rate swaps that are currently in effect.

At September 30, 2024 and December 31, 2023, we had $600.0 million of debt with variable interest rates that had been converted to fixed interest rates through derivative financial instruments which are carried at fair value. Differences between carrying value and fair value of our fixed-rate debt are primarily due to changes in interest rates. Inherently, fixed-rate debt is subject to fluctuations in fair value as a result of changes in the current market rate of interest on the valuation date.

In January 2024, subsidiaries of the GIC Joint Venture that are the borrowers under the GIC Joint Venture Term Loan entered into a $100.0 million interest rate swap to fix one-month term SOFR until January 2026. The interest rate swap became effective on October 1, 2024 and has an expiration date of January 13, 2026. Pursuant to the interest rate swap, we will pay a fixed rate of 3.77% and receive the one-month term SOFR floating rate index.

Our interest rate swaps have been designated as cash flow hedges and are valued using a market approach, which is a Level 2 valuation technique. At September 30, 2024 all but one of our interest rate swaps were in an asset position and at December 31, 2023, all our interest rate swaps were in an asset position. Derivative assets related to our interest rate swaps are recorded in Other assets and derivative liabilities are recorded in Accrued expenses in our Condensed Consolidated Balance Sheets. We are not required to post any collateral related to these agreements and are not in breach of any financial provisions of the agreements.

Changes in the fair value of the hedging instruments are deferred in Accumulated other comprehensive income in our Condensed Consolidated Balance Sheets and are reclassified as Interest expense in our Condensed Consolidated Statements of Operations in the period in which the hedged item affects earnings. In the next twelve months, we estimate that $4.4 million will be reclassified from Accumulated other comprehensive income and recorded as a decrease to Interest expense.
 
We characterize the realized and unrealized gain or loss related to derivative financial instruments designated as cash flow hedges as follows (in thousands):
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2024202320242023
Unrealized (loss) gain recognized in Accumulated other comprehensive income (loss) on derivative financial instruments$(9,380)$7,229 $3,093 $18,074 
Gain reclassified from Accumulated other comprehensive income to Interest expense$3,660 $3,589 $11,000 $7,849 
Total interest expense and other finance expense presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded$20,428 $22,020 $62,840 $65,177