Financial Instruments and Fair Values (Tables)

6 Months Ended

Jun. 30, 2017

Summary of the Terms of Agreements and the Fair Value of Derivative Financial Instruments

The table below summarizes the terms of agreements and the fair values of our derivative financial instruments as of June 30, 2017 and December 31, 2016 (dollar amounts in thousands):



	As of June 30, 2017						June 30, 2017					December 31, 2016
Derivative	Notional Amount		Receive Rate	Pay Rate	Effective Date	Expiration Date	Asset		Liability			Asset		Liability
Interest rate swap	$	265,000	1 Month LIBOR	2.1485%	August 31, 2017	August 24, 2022	$	—	$	(3,338	)	$	—	$	(1,634	)
Interest rate swap ⁽¹⁾	100,000		3 Month LIBOR	2.5050%	July 5, 2017	July 5, 2027	—		—			—		(684		)
Interest rate swap (1) (2)	80,000		3 Month LIBOR	2.5050%	July 5, 2017	July 5, 2027	—		—			—		(685		)
Interest rate swap	100,000		3 Month LIBOR	2.4860%	January 5, 2018	January 5, 2028	—		(1,207		)	224		—
Interest rate swap	100,000		3 Month LIBOR	2.4860%	January 5, 2018	January 5, 2028	—		(1,207		)	223		—
Interest rate swap	75,000		3 Month LIBOR	2.4860%	January 5, 2018	January 5, 2028	—		(905		)	167		—
Interest rate swap	75,000		3 Month LIBOR	2.7620%	June 1, 2018	June 1, 2028	—		(2,387		)	—		(1,295		)
Interest rate swap	75,000		3 Month LIBOR	2.7620%	June 1, 2018	June 1, 2028	—		(2,386		)	—		(1,293		)
Interest rate swap	100,000		3 Month LIBOR	2.4625%	June 1, 2018	June 1, 2028	—		(517		)	—		—
							$	—	$	(11,947	)	$	614	$	(5,591	)


(1)	During June 2017, these swaps aggregating $180.0 million were terminated in connection with the refinancing of several of our mortgage debt (see Note 4 Debt). As of June 30, 2017, the deferred net losses from these terminated hedges amounted to $6.0 million which is included in accumulated other comprehensive loss relating to net unrealized loss from derivative financial instruments.

(2)

During March 2017, $20.0 million of an original notional amount of $100.0 million was terminated. In connection with the partial termination and re-designation of the related cash flow hedges, $0.3 million is recognized as a loss from derivative financial instruments and included in Other Expense on the condensed consolidated statement of income for the six months ended June 30, 2017. There was no loss from derivative financial instruments for the three and six months ended June 30, 2016.

Effect of Derivative Financial Instruments Designated as Cash Flow Hedges

The table below shows the effect of our derivative financial instruments designated as cash flow hedges for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):



	Three Months Ended						Six Months Ended
Effects of Cash Flow Hedges	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Amount of gain (loss) recognized in other comprehensive income (loss) - effective portion	$	(14,367	)	$	(10,864	)	$	(12,973	)	$	(30,235	)
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense - effective portion	(43		)	—			(43		)	—
Amount of gain (loss) recognized in other expense - ineffective portion	(42		)	—			(289		)	—

Summary of the Carrying and Estimated Fair Values of Financial Instruments

The following tables summarize the carrying and estimated fair values of our financial instruments as of June 30, 2017 and December 31, 2016 (amounts in thousands):



	June 30, 2017
			Estimated Fair Value
	Carrying Value		Total		Level 1		Level 2		Level 3
Interest rate swaps included in prepaid expenses and other assets	$	—	$	—	$	—	$	—	$	—
Interest rate swaps included in accounts payable and accrued expenses	11,947		11,947		—		11,947		—
Mortgage notes payable	724,312		712,213		—		—		712,213
Senior unsecured notes - Exchangeable	243,106		282,878		—		282,878		—
Senior unsecured notes - Series A, B, and C	348,967		345,258		—		—		345,258
Unsecured term loan facility	263,114		265,000		—		—		265,000



	December 31, 2016
			Estimated Fair Value
	Carrying Value		Total		Level 1		Level 2		Level 3
Interest rate swaps included in prepaid expenses and other assets	$	614	$	614	$	—	$	614	$	—
Interest rate swaps included in accounts payable and accrued expenses	5,591		5,591		—		5,591		—
Mortgage notes payable	759,016		755,640		—		—		755,640
Senior unsecured notes - Exchangeable	241,474		282,435		—		282,435		—
Senior unsecured notes - Series A, B, and C	348,914		339,274		—		—		339,274
Unsecured term loan facility	262,927		265,000		—		—		265,000