Derivatives

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

10. Derivatives

We may enter into derivative contracts from time to time in order to mitigate the risk associated with our variable rate debt. We do not enter into such derivatives transactions for investment or trading purposes. Derivatives are carried at fair value within prepaid expenses and other assets in our condensed consolidated balance sheet. Upon execution, we may or may not designate such derivatives as accounting hedges.

Designated Hedges

We have entered into various interest rate cap agreements to mitigate potential increases in interest payments on our floating rate debt. The interest rate caps we currently hold have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income or loss each reporting period. Amounts reported in accumulated other comprehensive income or loss related to derivatives will be reclassified to interest expense as interest payments are made on our variable rate debt. During the next 12 months, we estimate that $6.2 million will be reclassified to interest expense.

No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedges during the three and nine months ended September 30, 2020 or 2019.

The table below summarizes our interest rate cap instruments as of September 30, 2020 ($ in thousands):

Effective Date	Termination Date	Strike Rate	Benchmark Rate	Notional Amount
November 2, 2018	May 9, 2024	2.50%	One-month LIBOR	$	505,000
October 16, 2018	October 15, 2022	2.30%	One-month LIBOR	83,270
October 16, 2018	October 15, 2022	2.30%	One-month LIBOR	89,149

Tabular Disclosure of Fair Values of Derivative Instruments on the Condensed Consolidated Balance Sheets ($ in thousands)

	Asset Derivatives
	Balance Sheet Location	Fair Value as of
		September 30, 2020		December 31, 2019
Derivatives designated as hedging instruments:
Interest rate caps	Prepaid expenses and other assets	$	114	$	2,070
Total		$	114	$	2,070

Tabular Disclosure of the Effect of Derivative Instruments on the Condensed Consolidated Statements of Operations ($ in thousands)

	Amount of Gain (Loss) Recognized in OCI on Derivative (effective portion)				Location of Gain (Loss) Reclassified from Accumulated OCI into Net Loss	Amount of Gain (Loss) Reclassified from Accumulated OCI into Net Loss (effective portion)				Total Amount of Interest Expense Presented in the Condensed Consolidated Statements of Operations
	Three Months ended September 30,					Three Months ended September 30,				Three Months ended September 30,
	2020		2019			2020		2019		2020		2019
Derivatives in cash flow hedging relationships
Interest rate caps	$	(245)	$	(1,463)	Interest expense	$	(1,419)	$	(1,430)	$	17,378	$	21,135

	Amount of Gain (Loss) Recognized in OCI on Derivative (effective portion)				Location of Gain (Loss) Reclassified from Accumulated OCI into Net Loss	Amount of Gain (Loss) Reclassified from Accumulated OCI into Net Loss (effective portion)				Total Amount of Interest Expense Presented in the Condensed Consolidated Statements of Operations
	Nine Months ended September 30,					Nine Months ended September 30,				Nine Months ended September 30,
	2020		2019			2020		2019		2020		2019
Derivatives in cash flow hedging relationships
Interest rate caps	$	(1,956)	$	(12,554)	Interest expense	$	(4,180)	$	(3,665)	$	55,790	$	63,810