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Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
 
The Company enters into interest rate derivative contracts to manage exposure to interest rate risks. The Company does not use derivative financial instruments for trading or speculative purposes. Derivative financial instruments are recognized at fair value and presented within other assets and other liabilities in the condensed consolidated balance sheets. Gains and losses resulting from changes in the fair value of derivatives that are neither designated nor qualify as hedging instruments are recognized within the change in fair value of derivatives and other in the condensed consolidated statements of comprehensive income. For derivatives that qualify as cash flow hedges, the gain or loss is reported as a component of other comprehensive income (loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings.

As of June 30, 2024, the Company held one interest rate cap corridor. The Company purchased a SOFR interest rate cap at 1.00% and sold a SOFR interest rate cap at 3.00%, resulting in a SOFR interest rate cap corridor of 1.00% to 3.00%, effective on September 1, 2022. This corridor is designated as a cash flow hedge. The intended goal of this corridor is to provide a level of protection from the effect of rising interest rates and reduce the all-in-cost of the derivative instrument. The Company paid a premium of $1.4 million to purchase the corridor. As of June 30, 2024, the notional amount was $73.6 million, which is the maximum notional amount. The corridor is scheduled to mature on September 1, 2024.
As of June 30, 2024, the Company held the following floating-to-fixed interest rate swaps ($ in thousands):
Related DebtNotional AmountIndexSwap Fixed Rate
Debt Effective Rate
Effective DateExpiration Date
Market at Mill Creek loan$11,053 
(a)
1-month SOFR3.43 %5.09 %12/13/20228/1/2025
Harbor Point Parcel 3 senior construction loan90,000 
(b)
1-month SOFR2.75 %4.82 %10/2/202310/1/2025
Floating rate pool of loans 330,000 
(c)
1-month SOFR2.75 %4.38 %10/1/202310/1/2025
Harbor Point Parcel 4 senior construction loan100,000 
(d)
1-month SOFR2.75 %5.12 %11/1/202311/1/2025
Floating rate pool of loans 300,000 
(e)
1-month SOFR2.75 %4.38 %12/1/202312/1/2025
Revolving credit facility and TD unsecured term loan
100,000 
(f)
Daily SOFR3.20 %4.84 %5/19/20235/19/2026
Thames Street Wharf loan
67,178 
(g)
Daily SOFR0.93 %2.33 %9/30/20219/30/2026
M&T unsecured term loan100,000 
(g)
1-month SOFR3.50 %5.05 %12/6/202212/6/2027
Liberty Retail & Apartments loan
21,000 
(a)
1-month SOFR
3.43 %4.93 %12/13/20221/21/2028
Senior unsecured term loan67,947 
(a)
1-month SOFR3.43 %4.98 %12/13/20221/21/2028
Total$1,187,178 
________________________________________
(a) The Company novated an existing 3.43% fixed rate swap with a $100.0 million notional and assigned (A) $11.1 million notional to the loan secured by Market at Mill Creek, effective April 17, 2024 and (B) $21.0 million to the loan secured by Liberty Retail & Apartments, effective February 1, 2024. Once the novated swap related to the Market at Mill Creek loan expires, the $67.9 million swap on the senior unsecured loan will increase back to $79.0 million.
(b) This interest rate swap agreement reduces the Company's interest rate exposure on the $180.4 million senior construction loan secured by the Company's Harbor Point Parcel 3 equity method investment as described in Note 6. As such, the loan is not reflected on the Company's consolidated balance sheets. The Company also paid $3.6 million to reduce the swap fixed rate.
(c) The Company paid $13.3 million to reduce the swap fixed rate.
(d) This interest rate swap agreement reduces the Company's interest rate exposure on the $109.7 million senior construction loan secured by the Company's Harbor Point Parcel 4 equity method investment as described in Note 6. As such, the loan is not reflected on the Company's consolidated balance sheets. The Company also paid $3.9 million to reduce the swap fixed rate.
(e) The Company paid $10.5 million to reduce the swap fixed rate.
(f) Subject to cancellation by the counterparty beginning on May 1, 2025 and the first day of each month thereafter.
(g) Designated as a cash flow hedge.

For the interest rate swaps and caps designated as cash flow hedges, realized gains and losses are reclassified out of accumulated other comprehensive income to interest expense in the condensed consolidated statements of comprehensive income due to payments received from and paid to the counterparty. During the next 12 months, the Company anticipates recognizing approximately $4.0 million of net hedging gains as reductions to interest expense. These amounts will be reclassified from accumulated other comprehensive income into earnings to offset the variability of the hedged items during this period.

The Company’s derivatives were comprised of the following as of June 30, 2024 and December 31, 2023 (in thousands): 
 June 30, 2024December 31, 2023
 Notional
Amount		Fair ValueNotional
Amount		Fair Value
 AssetLiability AssetLiability
Derivatives not designated as accounting hedges
Interest rate swaps$1,020,000 $25,321 $— $1,020,000 $20,761 $— 
Interest rate caps— — — — — — 
Total derivatives not designated as accounting hedges1,020,000 25,321 — 1,020,000 20,761 — 
Derivatives designated as accounting hedges
Interest rate swaps167,178 6,964 — 667,894 7,141 — 
Interest rate caps73,562 255 — 98,269 960 — 
Total derivatives$1,260,740 $32,540 $— $1,786,163 $28,862 $— 
The unrealized changes in the fair value of the Company’s derivatives during the three and six months ended June 30, 2024 and 2023 were comprised of the following (in thousands): 
 Three Months Ended June 30,Six Months Ended June 30,
 2024202320242023
Interest rate swaps$(975)$10,738 $9,074 $7,236 
Interest rate caps8 362 24 (366)
Total unrealized change in fair value of interest rate derivatives$(967)$11,100 $9,098 $6,870 
Comprehensive income statement presentation:
Change in fair value of derivatives and other
$(1,951)$4,294 $4,560 $490 
Unrealized cash flow hedge gains984 6,806 4,538 6,380 
Total unrealized change in fair value of interest rate derivatives$(967)$11,100 $9,098 $6,870