Derivative Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

8. Derivative Instruments and Hedging Activities

On July 29, 2021, in connection with the $860,000,000 refinancing of 1301 Avenue of the Americas, we had entered into interest rate swap agreements with an aggregate notional amount of $500,000,000 to fix LIBOR at 0.46% through August 2024. On June 16, 2023, we amended the swap agreements to replace LIBOR with SOFR, effective July 7, 2023. We also entered into interest rate cap agreements with an aggregate notional amount of $360,000,000 to cap LIBOR at 2.00% which expired in August 2023. Upon expiration of these agreements, we entered into new interest rate cap agreements for the same notional amount to cap SOFR at 4.50% through August 2024. 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 loss of $25,444,000 for the year ended December 31, 2023, and 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 the fair value of these derivative financial instruments. See Note 10, Accumulated Other Comprehensive Income. During the next twelve months, we estimate that $13,008,000 of the amounts to be recognized in accumulated other comprehensive income 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, 2023

December 31, 2022

(Amounts in thousands)

1301 Avenue of the Americas

$

500,000

Jul-2021

Aug-2024

SOFR

0.49

%

$

13,726

$

32,681

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

$

13,726

$

32,681

	Notional		Effective	Maturity	Benchmark	Strike			Fair Value as of
Property	Amount		Date	Date	Rate	Rate			December 31, 2023		December 31, 2022
(Amounts in thousands)
1301 Avenue of the Americas	$	360,000	Aug-2023	Aug-2024	SOFR		4.50	%	$	1,263	$	-
1301 Avenue of the Americas		360,000	Jul-2021	Aug-2023	LIBOR		2.00	%		-		6,123
Total interest rate cap assets designated as cash flow hedges (included in "other assets")									$	1,263	$	6,123

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, 2023, we did not have any obligations relating to our interest rate swaps or interest rate caps that contained such provisions.