Derivatives and Hedging Activities

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

DERIVATIVES AND HEDGING ACTIVITIES

The Company uses derivative instruments to mitigate the effects of interest rate volatility inherent in its variable rate debt, which could unfavorably impact our future earnings and forecasted cash flows. The Company does not use derivative instruments for speculative or trading purposes.

The Operating Partnership is party to interest rate swaps to mitigate the interest rate risk inherent in its senior secured term loan B facility. The principal terms of these interest rate swaps at March 31, 2017 are as follows:

						Fair Value Asset (Liability)
Effective Date	Maturity Date	Notional Amount		Fixed Rate		March 31, 2017			December 31, 2016
(in thousands, except percentages)
December 8, 2016	November 30, 2021	$	500,000	1.825	%	$	2,770		$	1,879
January 31, 2017	November 30, 2021	700,000		1.964	%	(1,525		)	N/A
		$	1,200,000			$	1,245		$	1,879

Interest rate swaps valued in net unrealized gain positions are recognized as asset balances within the prepaid expenses and other assets balance. Interest rate swaps valued in net unrealized loss positions are recognized as liability balances within accounts payable, accrued expenses and other liabilities balance. For the three months ended March 31, 2017, the amount recorded in other comprehensive income related to the derivative instruments was a net loss of $0.6 million. There was no ineffective portion of the change in fair value derivatives. During the three months ended March 31, 2017, the Company recorded interest expense of $2.7 million related to the swap agreements.