Derivatives Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2015

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives Instruments and Hedging Activities

7.     Derivative Instruments and Hedging Activities

We manage our market risk on variable rate debt by entering into interest rate swaps to fix the rate on all or a portion of the debt for varying periods through maturity. These interest rate swaps are accounted for as derivative instruments and, pursuant to ASC 815, are recorded on our balance sheet at fair value. Changes in the fair value of interest rate swaps are accounted for based on the hedging relationship and their designation and qualification as either fair value hedges or cash flow hedges.

Interest Rate Swaps – Non-designated Hedges

As of September 30, 2015, we had 23 interest rate swaps with an aggregate notional amount of $2.2 billion that were not designated as hedges. Changes in the fair value of interest rate swaps that are not designated as hedges are recognized in earnings. In the three and nine months ended September 30, 2015, we recognized unrealized gains of $15,772,000 and $49,497,000, respectively, from the changes in the fair value of these interest rate swaps.  The table below provides additional details on our interest rate swaps that are not designated as hedges.

	Notional				Strike			Fair Value as of
Property	Amount		Effective Date	Maturity Date	Rate			September 30, 2015		December 31, 2014
(Amounts in thousands)
1633 Broadway	$	772,100	Dec-2006 to Jun-2008	Dec-2016		4.92	%	$	40,043	$	60,191
900 Third Ave		255,000	Nov-2007 to Nov-2012	Nov-2015 to Nov-2017		4.15	%		14,495		19,158
31 W 52nd Street		337,500	Dec-2007 to Dec-2012	Dec-2015 to Dec-2017		4.49	%		22,114		28,748
One Market Plaza		840,000	Aug-2007 to Aug-2012	Aug-2017		5.02	%		68,047		86,099
Total interest rate swap liabilities related to non-designated hedges								$	144,699	$	194,196

Interest Rate Swaps – Designated as Cash Flow Hedges

On September 16, 2015, we entered into three forward starting interest rate swaps with an aggregate notional amount of $1.0 billion in advance of the anticipated refinancing of the mortgage debt at 1633 Broadway. These interest rate swaps are designated as cash flow hedges. Changes in the fair value of interest rate swaps that are designated as cash flow hedges are recognized in accumulated other comprehensive income (outside of earnings).  In the three and nine months ended September 30, 2015, we recognized other comprehensive losses of $18,602,000 from the changes in the fair value of these interest rate swaps. The table below provides additional details on our interest rate swaps that are designated as cash flow hedges.

	Notional				Strike			Fair Value as of
Property	Amount		Effective Date	Maturity Date	Rate			September 30, 2015		December 31, 2014
(Amounts in thousands)
1633 Broadway	$	1,000,000	Dec-2015	Dec-2020 to Dec-2022		1.79	%	$	18,602	$	-
Total interest rate swap liabilities related to cash flow hedges								$	18,602	$	-