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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
 12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
 
We are exposed to interest rate risk through our variable-rate debt. We manage this risk primarily by managing the amount, sources, and duration of our debt funding and through the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage our exposure to known or expected cash payments related to our variable-rate debt. The maximum length of time over which we have hedged our exposure to variable interest rates with our existing derivative financial instruments is approximately seven years.
 
Our objectives in using derivative financial instruments are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps as part of our interest rate risk management strategy. Our interest rate swaps are designated as cash flow hedges and involve the receipt of variable-rate payments from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
 
Our agreements with our derivative counterparties contain provisions such that if we default, or can be declared in default, on any of our indebtedness, then we could also be declared in default on our derivative financial instruments.
 
Information about our derivative financial instruments at December 31, 2024 and 2023 is as follows (dollar amounts in thousands): 
Average
Annual
Notional AmountFair Value
Effective
December 31,
December 31,
Contract Date
Effective DateExpiration Date
Fixed Rate
2024202320242023
Operating Partnership:
June 11, 2018September 28, 2018September 30, 20242.86 %$— $75,000 $— $1,170 
June 11, 2018December 31, 2018December 31, 20252.92 %125,000 125,000 1,582 2,877 
July 26, 2022January 31, 2023January 31, 20272.60 %100,000 100,000 2,824 3,134 
July 26, 2022January 31, 2023January 31, 20292.56 %100,000 100,000 5,325 4,273 
Total Operating Partnership325,000 400,000 9,731 11,454 
GIC Joint Venture:
March 24, 2023July 1, 2023January 13, 20263.35 %100,000 100,000 754 1,254 
March 24, 2023July 1, 2023January 13, 20263.35 %100,000 100,000 754 1,250 
January 19, 2024October 1, 2024January 13, 20263.77 %100,000 — 334 — 
Total GIC Joint Venture300,000 200,000 1,842 2,504 
 Total3.09 %(1)$625,000 $600,000 $11,573 $13,958 
 (1) Represents the weighted-average effective interest rate of our current interest rate swaps at December 31, 2024.

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 December 31, 2024 and 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 other and derivative liabilities (when applicable) are included in Accrued expenses and other in our 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 Other comprehensive income (loss) and are reclassified to Interest expense in our Consolidated Statements of Operations in the period in which the hedged item affects earnings. In 2025, we estimate that an additional $6.4 million will be reclassified from Other comprehensive income and recorded as a decrease to Interest expense.
 
The table below details the location in the financial statements of the gain or loss recognized on derivative financial instruments designated as cash flow hedges (in thousands):
For the Years Ended December 31,
 202420232022
Gain recognized in Accumulated other comprehensive income (loss) on derivative financial instruments$11,218 $8,677 $29,744 
Gain (loss) reclassified from Accumulated other comprehensive income to Interest Expense$13,602 $11,561 $(2,820)
Total interest expense and other finance expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
$82,632 $86,798 $65,581