Financial Instruments and Fair Values (Tables)

12 Months Ended

Dec. 31, 2017

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

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



								December 31, 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	$	—	$	(436	)	$	—	$	(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 (1)	100,000		3 Month LIBOR	2.4860	%	January 5, 2018	January 5, 2028	—		—			224		—
Interest rate swap (1)	100,000		3 Month LIBOR	2.4860	%	January 5, 2018	January 5, 2028	—		—			223		—
Interest rate swap (1)	75,000		3 Month LIBOR	2.4860	%	January 5, 2018	January 5, 2028	—		—			167		—
Interest rate swap (1)	75,000		3 Month LIBOR	2.7620	%	June 1, 2018	June 1, 2028	—		—			—		(1,295		)
Interest rate swap (1)	75,000		3 Month LIBOR	2.7620	%	June 1, 2018	June 1, 2028	—		—			—		(1,293		)
								$	—	$	(436	)	$	614	$	(5,591	)

(1)

During 2017, these swaps were terminated in connection with the refinancing of several of our mortgage debt (see Note 4 Debt). As of December 31, 2017, the deferred net losses from these terminated hedges amounted to $15.1 million which is included in accumulated other comprehensive loss relating to net unrealized loss from derivative financial instruments. We will reclassify into earnings, as an increase to interest expense, approximately $1.5 million per year over the 10-year terms of the related debt due 2027, from the balance that is included in accumulated other comprehensive income on the consolidated balance sheets.

(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 Expenses on the consolidated statement of income for the year ended December 31, 2017. There were no losses from derivative financial instruments for the years ended December 31, 2016 and 2015.

Summary of 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 on accumulated other comprehensive income (loss) for the years ended December 31, 2017, 2016 and 2015 (amounts in thousands):



Effects of Cash Flow Hedges	December 31, 2017			December 31, 2016			December 31, 2015
Amount of gain (loss) recognized in other comprehensive income (loss)	$	(11,658	)	$	(3,054	)	$	(1,922	)
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense	(1,142		)	—			—

The table below shows the effect of our derivative financial instruments designated as cash flow hedges on the consolidated statements of income for the years ended December 31, 2017, 2016 and 2015 (amounts in thousands):



Effects of Cash Flow Hedges	December 31, 2017			December 31, 2016			December 31, 2015
Total interest (expense) presented on the consolidated statements of income in which the effects of cash flow hedges are recorded	$	(68,473	)	$	(70,595	)	$	(65,743	)
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense	(1,142		)	—			—

Schedule of the Aggregate Carrying Value of Debt and Estimates of Fair Value

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



	December 31, 2017
	Carrying Value		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	436		436		—		436		—
Mortgage notes payable	717,164		707,300		—		—		707,300
Senior unsecured notes - Exchangeable	244,739		275,723		—		275,723		—
Senior unsecured notes - Series A, B, C, D, E and F	463,156		460,352		—		—		460,352
Unsecured term loan facility	263,662		265,000		—		—		265,000



	December 31, 2016
	Carrying Value		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