Derivative Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

9. Derivative Instruments and Hedging Activities

We have entered into interest rate swap agreements with an aggregate notional amount of $500,000,000 to fix LIBOR at 0.46% through August 2024. We also entered into interest rate cap agreements with an aggregate notional amount of $360,000,000 to cap LIBOR at 2.00% through August 2023. These interest rate swaps and interest rate caps are designated as cash flow hedges and therefore changes in their fair values are recognized in other comprehensive income or loss (outside of earnings). We recognized other comprehensive income of $31,839,000 and $6,857,000 for the years ended December 31, 2022 and 2021, respectively, from the changes in fair value of these derivative financial instruments. See Note 11, Accumulated Other Comprehensive Income. During the next twelve months, we estimate that $27,817,000 of the amounts to be recognized in accumulated other comprehensive income or loss will be reclassified as a decrease to interest expense.

The table below provide additional details on our interest rate swaps and interest rate caps that are designated as cash flow hedges.

Notional

Effective

Maturity

Benchmark

Strike

Fair Value as of

Property

Amount

Date

Date

Rate

Rate

December 31, 2022

December 31, 2021

(Amounts in thousands)

1301 Avenue of the Americas

$

500,000

Jul-2021

Aug-2024

LIBOR

0.46

%

$

32,681

$

6,691

Total interest rate swap assets designated as cash flow hedges (included in "other assets")

$

32,681

$

6,691

Notional

Effective

Maturity

Benchmark

Strike

Fair Value as of

Property

Amount

Date

Date

Rate

Rate

December 31, 2022

December 31, 2021

(Amounts in thousands)

1301 Avenue of the Americas

$

360,000

Jul-2021

Aug-2023

LIBOR

2.00

%

$

6,123

$

306

Total interest rate cap assets designated as cash flow hedges (included in "other assets")

$

6,123

$

306

We have agreements with various derivative counterparties that contain provisions wherein a default on our indebtedness could be deemed a default on our derivative obligations, which would require us to settle our derivative obligations for cash. As of December 31, 2022, we did not have any obligations relating to our interest rate swaps or interest rate caps that contained such provisions.