Derivative Instruments

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedges, Assets [Abstract]

The Company has entered into several interest rate swap contracts and interest rate cap contracts in connection with certain of its secured mortgage loans in order to limit its exposure against the variability of future interest rates on its variable interest rate borrowings. The Company’s interest rate swaps economically fixed the interest rates on each of the loans to which they relate and the interest rate cap agreements have economically limited the interest rate on each of the loans to which they relate. The Company has not designated any of these derivatives as hedges for accounting purposes. The Company has not entered into a master netting arrangement with its third-party counterparty and does not offset on its consolidated balance sheets the fair value amount recorded for its derivative instruments.

The Company has also entered into foreign currency forward contracts as economic hedges against the variability of foreign exchange rates related to certain cash flows of some of its international investments. These forward contracts fixed the currency exchange rates on each of the investments to which they related. The Company did not designate any of these contracts as fair value or cash flow hedges for accounting purposes. In December 2018, the Company entered into a €15.0 million foreign currency forward contract with an effective date of December 20, 2018 and a trade date of February 25, 2019, in connection with the funding of the Maintal Logistics acquisition. Additionally, in March 2019, the Company entered into an initial €46.0 million foreign currency forward contract with an effective date of March 1, 2019 and a trade date of March 20, 2019, in connection with the acquisition of ABC Westland. Upon settlement of the initial forward contract in March 2019, the Company entered into a new €46.0 million foreign currency forward contract in connection with the acquisition of ABC Westland with an effective date of March 31, 2019 and a trade date of April 3, 2019. In October 2019, the Company entered into two foreign currency forward contracts for £33.4 million and £18.6 million, each with an effective date of October 24, 2019 and a trade date of October 28, 2019 in connection with the acquisitions of Charles Tyrwhitt Distribution Centre and DSG Bristol. In December 2019, the Company entered into a £26.0 million foreign currency forward contract with an effective date of December 9, 2019 and a trade date of December 10, 2019 in connection with the acquisition of Royal Mail Edinburgh. See Note 3—Investment Property for additional information regarding the acquisition of these properties. The Company also entered into two foreign currency forward contracts in October 2019 and December 2019 in order to buy U.S. dollars using future proceeds received on debt denominated in British pounds in the amounts of £31.0 million and £15.0 million, respectively, each with a trade date of February 28, 2020. In February 2020, these foreign currency contracts were extended to a trade date of May 29, 2020. See Foreign Currency Forward Contracts table below for additional information on these foreign currency contracts as of December 31, 2019.

The table below provides additional information regarding the Company’s interest rate derivative contracts (in thousands, except percentages).



Interest Rate Contracts
Type	Property	Effective Date	Expiration Date	Maximum Capacity of Debt in Functional Currency		Notional Amount		Interest Rate Received	Pay Rate /Strike Rate
Interest rate cap	Bishop’s Square	March 3, 2015	April 25, 2020	€	55,200	€	55,200	Euribor	2.00 %
Interest rate cap	Montrose Student Residences	March 24, 2017	March 23, 2022	€	22,605	€	16,954	Euribor	1.25 %
Interest rate cap	Queen’s Court Student Residences	December 20, 2017	December 20, 2020	£	29,500	£	22,125	LIBOR	2.00 %
Interest rate cap	Venue Museum District	September 21, 2018	October 9, 2020	$	45,000	$	45,000	LIBOR	3.50 %
Interest rate cap	Fresh Park Venlo	October 8, 2018	August 15, 2023	€	75,000	€	52,487	Euribor	2.00 %
Interest rate cap	Maintal Logistics	February 28, 2019	February 28, 2024	€	23,500	€	16,450	Euribor	2.00 %
Interest rate cap	ABC Westland	May 3, 2019	February 15, 2024	€	75,000	€	52,500	Euribor	1.00 %
Interest rate cap	Glasgow West End	September 27, 2019	September 24, 2024	£	43,200	£	32,400	LIBOR	2.00 %
Interest rate swap	Gdańsk PL II	October 10, 2019	September 20, 2019	€	16,800	€	16,800	Euribor	(0.36	)%
Interest rate swap	Łódź Urban Logistics	October 10, 2019	September 20, 2024	€	13,600	€	13,600	Euribor	(0.36	)%

The table below provides additional information regarding the Company’s foreign currency forward contracts that were outstanding as of December 31, 2019 (in thousands).



Foreign Currency Forward Contracts
Effective Date	Expiration Date	Notional Amount		Buy/Sell	Traded Currency Rate
October 24, 2019	February 28, 2020	£	31,000	GBP/USD	$	1.29
December 9, 2019	February 28, 2020	£	15,000	GBP/USD	$	1.32

The table below presents the effects of the changes in fair value of the Company’s derivative instrument in the Company’s consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2019 and 2018 (in thousands):



	Gain (Loss) Recorded on Derivative Instruments
	Year Ended
	12/31/2019			12/31/2018			12/31/2017
Derivatives not designated as hedging instruments:
Interest rate swaps	$	(149	)	$	—		$	—
Interest rate caps	(454		)	(236		)	(134		)
Foreign currency forward contracts	(1,689		)	(36		)	(238		)
Total gain (loss) on derivatives	$	(2,292	)	$	(272	)	$	(372	)