In the normal course of our ongoing business operations, we encounter economic risk. There are four main components of economic risk that impact us: interest rate risk, credit risk, market risk, and foreign currency risk. We are primarily subject to interest rate risk on our interest-bearing liabilities. Credit risk is the risk of default on our operations and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related loans, as well as changes in the value of our other investments due to changes in interest rates or other market factors. We own international investments, primarily in Europe, and are subject to risks associated with fluctuating foreign currency exchange rates.

There have been no significant changes in our derivative financial instrument policies from what was disclosed in the 2019 Annual Report. As of both June 30, 2020 and December 31, 2019, no cash collateral had been posted or received for any of our derivative positions.



Derivatives Designated as Hedging Instruments	Balance Sheet Location	Derivative Assets Fair Value at				Derivative Liabilities Fair Value at
Derivatives Designated as Hedging Instruments	Balance Sheet Location	June 30, 2020		December 31, 2019		June 30, 2020			December 31, 2019
Foreign currency collars	Accounts receivable and other assets, net	$	1,795	$	1,444	$	—		$	—
Foreign currency forward contracts	Accounts receivable and other assets, net	368		861		—			—
Interest rate caps	Accounts receivable and other assets, net	32		116		—			—
Interest rate swaps	Accounts receivable and other assets, net	—		53		—			—
Interest rate swaps	Accounts payable, accrued expenses and other liabilities	—		—		(4,588		)	(1,991		)
		2,195		2,474		(4,588		)	(1,991		)
Derivatives Not Designated as Hedging Instruments
Interest rate swap	Accounts payable, accrued expenses and other liabilities	—		—		(34		)	(48		)
		—		—		(34		)	(48		)
Total derivatives		$	2,195	$	2,474	$	(4,622	)	$	(2,039	)



	Amount of Loss Recognized on Derivatives in Other Comprehensive Income (Loss)
	Three Months Ended June 30,						Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	2020			2019			2020			2019
Foreign currency collars	$	(640	)	$	(84	)	$	500		$	721
Foreign currency forward contracts	(286		)	(361		)	(493		)	(518		)
Interest rate swaps	(33		)	(1,528		)	(2,650		)	(2,415		)
Interest rate caps	15			2			(124		)	3
Derivatives in Net Investment Hedging Relationship ^(a)
Foreign currency collars	(20		)	(19		)	129			(18		)
Foreign currency forward contracts	—			15			—			15
Total	$	(964	)	$	(1,975	)	$	(2,638	)	$	(2,212	)



		Amount of Gain on Derivatives Reclassified from Other Comprehensive Income (Loss) into Income
Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	2020			2019			2020			2019
Interest rate swaps	Interest expense	$	(434	)	$	22		$	(613	)	$	49
Foreign currency forward contracts	Other gains and (losses)	264			338			542			684
Foreign currency collars	Other gains and (losses)	235			39			355			50
Interest rate caps	Interest expense	(20		)	(3		)	(37		)	(6		)
Total		$	45		$	396		$	247		$	777

Amounts reported in Other comprehensive income (loss) related to our interest derivative contracts will be reclassified to Interest expense as interest is incurred on our variable-rate debt. Amounts reported in Other comprehensive income (loss) related to foreign currency derivative contracts will be reclassified to Other gains and (losses) when the hedged foreign currency contracts are settled. As of June 30, 2020, we estimated that an additional $2.0 million and $1.2 million will be reclassified as Interest expense and Other gains and (losses), respectively, during the next 12 months.



		Amount of Gain on Derivatives Recognized in Income
Derivatives Not in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
Derivatives Not in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	2020			2019			2020			2019
Foreign currency collars	Other gains and (losses)	$	(90	)	$	(5	)	$	(9	)	$	113
Interest rate swap	Interest expense	3			—			11			—
Foreign currency forward contracts	Other gains and (losses)	—			—			7			—
Derivatives in Cash Flow Hedging Relationships
Interest rate swaps	Interest expense	434			13			613			12
Foreign currency collars	Other gains and (losses)	—			—			—			7
Total		$	347		$	8		$	622		$	132

We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we attempt to obtain mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our joint investment partners have obtained, and may in the future obtain, variable-rate non-recourse secured debt and, as a result, we have entered into, and may continue to enter into interest rate swap agreements or interest rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of a loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements.



Interest Rate Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2020 ^(a)
Interest rate swaps	10	97,376	USD	$	(4,588	)
Interest rate caps	2	59,000	GBP	19
Interest rate cap	1	12,975	EUR	13
Derivatives Not Designated as Hedging Instruments
Interest rate swap ^(b)	1	9,063	EUR	(34		)
				$	(4,590	)

We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the Norwegian krone. We manage foreign currency exchange rate movements by generally placing our debt service obligation on an investment in the same currency as the tenant’s rental obligation to us. This reduces our overall exposure to the net cash flow from that investment. However, we are subject to foreign currency exchange rate movements to the extent that there is a difference in the timing and amount of the rental obligation and the debt service. Realized and unrealized gains and losses recognized in earnings related to foreign currency transactions are included in Other gains and (losses) in the condensed consolidated financial statements.

In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency forward contracts and collars. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Our foreign currency forward contracts and foreign currency collars have maturities of 72 months or less.



Foreign Currency Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2020
Designated as Cash Flow Hedging Instruments
Foreign currency collars	17	13,902	EUR	$	1,305
Foreign currency collars	14	25,130	NOK	457
Foreign currency forward contracts	3	1,240	EUR	368
Designated as Net Investment Hedging Instruments
Foreign currency collar	1	2,500	NOK	33
				$	2,163

We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received. No collateral was received as of June 30, 2020. At June 30, 2020, our total credit exposure was $1.6 million and the maximum exposure to any single counterparty was $0.9 million.

Some of the agreements we have with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. As of June 30, 2020, we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives in a net liability position was $4.8 million and $2.1 million as of June 30, 2020 and December 31, 2019, respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of these provisions as of June 30, 2020 or December 31, 2019, we could have been required to settle our obligations under these agreements at their aggregate termination value of $5.1 million and $2.2 million, respectively.